Federal Supreme Court of Germany (Bundesgerichtshof) upheld the 2019 decision of the Federal Cartel

Office (Bundeskartellamt) against Facebook during interim proceedings where it confirmed that there
was an abused its dominance on the national market for social networks for private users. In a nutshell,
facebook must stop collecting data about its users withour their consent when they are using apps and
visiting websites outside the social network.

1. Digital platforms providing services to consumers without demanding monetary compensation,

but obtaining far-reaching access to their users’ personal data instead.
2. The relationship of data protection legislation, most notably the General Data protection
regulation (GDPR), and competition law.
3. Facebook was indirectly bound by the human rights enshrined in the German constitution, even
though it is a private entity.

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Proceeding on February 2019, Bundeskartellant based on sec.19 CA and Art 102 TFEU

-Facebook is dominant on the market for social networks and abused this position by using terms of
service allowing it to collect personal data of its users outside the actual social network and assign
these data to the individual user accounts.

- services owned by Facebook ( Instagram, WhatsApp)

-so called ‘ Facebook Business Tools’ – plugins

- take it or leave it situation users were subjected to was abusive in which it made them lose control
over their personal data and harm competition.

Dusseldorf court granted interim relief to fb in which the court found that facebook’s conduct did
not result in any damage to competition as users suffered no financial loss. It held that there was no
causuality was given between F’s market dominance and use of its terms of service, arguing that
other companies were using similar conditions and the abusive terms of servive were thus not
deemed a result of market dominance.

Federal Supreme court – overrule

Decision: Facebook must start implementing the decision, pending final judgment in the main
proceedings.

Approach in that decision:

1. Theory of Harm
Competition policy considerations- ‘imposed extension of services’ it is seen based on the
differentiation made between ‘on facebook’ and ‘off facebook’ data. – price to be paid is higher
when off data facebook. There is a significant numbers of users who would like to use FB
without higher degree of personalization ( and the higher data price). But they have no choice,
and were forced to agree to the whole package which is on and off fb data processing.
- In competition law, this outcome could not be expected; the market would cater for those
users not willing to give away so much data and users would have choice between more or
less intensive data collection.
 - The court sees damage in two situation
(i) Users lack choice and are forced to supply more data than they wish to, having to
use a product they do not want in is entirety.
(ii) Facebook’s (potential) competitors are harmed as it becomes more and more
difficult to compete for advertising contracts.

Facebook abuses its market dominance by making al users agree to terms of service that allow fb to
collect ‘ off facebook’ data and merge them with the user account without their further consent

1. Direct financial link between two sides. Assessment Directive (EU)

2. Impedes competition in relation to its comptitions.
3. Exploitative one
4. One must access the overall effect on competition
5. It does nt matter if other non market dominant companies would be factually able to impose
the same terms of service on their users, as long as the damage to competition results from the
market dominance of the company in question.
6. Facebook’s conduct leads to an outcome to be expected in a competitive scenario
- Fb did not provide a less data intensive option indicates that it can act on the market
irrespective of user preferences, which turn implies an abuse of dominance. Yet the court
found that fb;s market dominance is so strong that imitation of its terms of services by other
companies is natural and does not allow any inferences to be drawn on what a coompettive
outcome would look like
7. Fb’s use of its terms of service impedes competition. First of all, competitors are facing entry
barriers to the market for social networks, as fb benefits from direct network effects on the user
side – may lead to anti cpmpetitiove effects on the market for online advertisements as well.
Increase entry barrier
8. Competition is harmed vertically and horizontally.
Vertically; a certain number of users must pay for an extended service they want
Consumer/ customer- lack of options
Horizontally; competition is impeded on the advertising market.
Harm for other competitors in advertising market contract