Meta’s Methodology for Data Harvesting in Germany Loses Appeal, Tuesday, the European Union’s highest court upheld a decision by German antitrust regulators that the company had abused its dominant position in social media, putting into doubt Meta’s ability to harvest user data in order to sell personalized advertisements.
The ruling in the closely watched case by the European Court of Justice cleared the way for Germany’s top antitrust enforcer, the Bundeskartellamt, to prohibit Meta from combining user data collected across its various platforms, including Facebook, Instagram, and WhatsApp, as well as from external websites and apps, unless it receives explicit permission from users.
The decision undermines Meta’s business model, which relies on selling targeted advertisements based on the vast amounts of data it collects about its users as they use Meta services and browse the internet at large.
Why It Matters: Strengthening Big Tech’s oversight
The decision provides supporters of stricter regulation of the world’s largest technology companies with renewed impetus. Although the decision only applies to Meta services in Germany, it is anticipated that it will influence antitrust authorities throughout the European Union.
In the coming months, the Digital Markets Act, a new antitrust law enacted by the European Union, will take effect and grant regulators new authority to promote competition in the technology sector.
Specifically, Tuesday’s court ruling provides European Union authorities with a more solid legal basis to investigate how data-collection practices could undermine competition, a new direction for antitrust enforcement.
The court ruled that regulators investigating antitrust cases can also investigate whether a company violates the General Data Protection Regulation (GDPR) of the European Union.
A fresh perspective on antitrust law
In 2019, German regulators used a novel interpretation of antitrust law to determine that Meta’s data collection practices violated not only competition rules, but also the General Data Protection Regulation. The authorities stated that Meta was required to obtain consent from users and could not collect an infinite quantity of data simply because a user had signed up for one of the company’s services.
Germany’s top antitrust regulator, Andreas Mundt, stated that Meta’s policies constituted to a false choice, compelling users to either use Meta services and share their data, or completely avoid the company’s ubiquitous social media sites.
As a result of the company’s appeal, the case eventually reached the European Court of Justice in Luxembourg.
Mr. Mundt has long advocated for stricter regulation of Facebook and other tech titans. According to his argument, Facebook uses the user data it obtains to strengthen its position over rivals, thereby harming competition.
What Comes Next?
Meta stated in a statement that it was “evaluating the Court’s decision and will have more to say in due course.”
The company must now make modifications in Germany to comply with the decision. This will presumably include a new menu that gives users more control over the data collection process.
But the decision also has ramifications for Amazon, Google, and TikTok and other online platforms that collect large quantities of data for digital advertising.
Mr. Mundt, the German antitrust regulator, said in a statement on Tuesday, “When large internet companies use the highly personal data of consumers, this can also be considered abusive under competition law.” The ruling will have far-reaching effects on data economy business models.