German court: Facebook Like button data transfer illegal without user consent
Decision is the latest in a string of EU privacy investigations and setbacks for the social giant.
Yesterday, a court in a Düsseldorf ruled that German websites using Facebook buttons could not transfer data to the company without user understanding or consent. Clothing retailer Peek & Cloppenburg, which featured the Like button on its site, was found in violation of German data protection law because it didn’t sufficiently explain to users that their data would flow to Facebook.
The court stated, according to Reuters, “A mere link to a data protection statement at the foot of the website does not constitute an indication that data are being or are about to be processed.” The retailer said that it would wait to see the court’s full opinion before determining whether to appeal.
Facebook was not a party to the litigation. However, the case is another setback for the social site in Europe. Facebook’s data collection and ad practices have been coming under intensifying scrutiny in multiple countries, including France and Belgium.
The ruling doesn’t signal the end of the Like button or other Facebook buttons. Rather, it suggests that EU cookie-like disclosures will be required in the future informing Europeans that by using sites with embedded social buttons, their data may be captured and sent to Facebook.
Earlier this month, Facebook was notified of an unusual antitrust investigation in Germany for alleged abuse of its market position in collecting user data for ad purposes. This is not a typical competition case but involves Facebook’s privacy policies.
The idea is that Facebook’s dominant position in the market enables the company to impose terms on users that potentially violate privacy laws in Germany. The German competition authority, the Bundeskartellamt, asserted that Facebook’s terms and conditions are difficult for users to understand and potentially illegal:
There is an initial suspicion that Facebook’s conditions of use are in violation of data protection provisions. Not every law infringement on the part of a dominant company is also relevant under competition law. However, in the case in question Facebook’s use of unlawful terms and conditions could represent an abusive imposition of unfair conditions on users. The Bundeskartellamt will examine, among other issues, to what extent a connection exists between the possibly dominant position of the company and the use of such clauses.
Privacy violations in the EU can now result in fines of of up to four percent of global revenue in extreme cases. However, antitrust violations can go as high as 10 percent of global revenue. Facebook’s 2015 revenue was nearly $18 billion.
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