Meta Platforms, Facebook's parent firm, has failed to defend its stand in Europe's highest court. Following a German data curb order, The Court of Justice of the European Union (CJEU) has favored Germany's competition regulators to launch an antitrust probe that will impact the tech giant's ad-centered business model.
The ruling could grant antitrust authorities greater flexibility in scrutinizing Big Tech companies.
History of Meta's Battle With German Antitrust Watchdog
According to Reuters, the case revolved around a 2019 order issued by the German cartel office, directing Meta to cease collecting users' data without their consent. The German authority deemed this practice as an abuse of market power.
Meta, known for its data-driven advertising model, challenged the order, leading a German court to seek guidance from the CJEU.
When this reached Europe, the CJEU's verdict established that antitrust agencies have the right to examine whether a company's conduct aligns with regulations beyond competition law. This includes data protection concerns, which fall within the jurisdiction of national data protection authorities.
Meta's data collection practices, crucial for its behavioral advertising model, came under scrutiny in this case.
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Meta's Response Regarding the Case
In an interview with The Wall Street Journal, Meta's spokesperson told the publication that the company was currently "evaluating the court's decision."
At the moment, that's the only statement that we heard from the tech titan. However, the representative has assured that the firm will release more announcements in the future about the ruling.
Use of Personal Data is 'Abusive'
Indeed, the recent ruling is a huge blow for Meta given that it earns revenues from the personalized ads on Facebook and other platforms. Because of this, it will need the EU's permission before it can use the user's data, per Engadget.
The German cartel office welcomed the court's decision, highlighting the significance of data in establishing market power. They emphasized that the use of personal data by major internet companies can potentially be abusive under antitrust law.
The legal experts, however, expressed caution regarding whether antitrust authorities would delve into the intricacies of privacy law. While the ruling grants more leeway to antitrust regulators, it remains to be seen whether they will assume the role of GDPR regulators.
"You still need to explain why it is relevant for antitrust law and demonstrate restrictive effects and abuse, and they will need to coordinate with the GDPR authorities," law firm Cleary Gottlieb's partner Thomas Graf said.
Meanwhile, Privacy activist Max Schrems, known for filing complaints against Meta, welcomed the judgment. He foresees a positive impact on his ongoing legal battle with the company.
The court's ruling may provide support to privacy activists seeking to hold tech giants accountable for their data practices.
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