Meta Platforms, the parent firm of Facebook, Instagram, and WhatsApp, lost its case against a German data restriction ruling on Tuesday when Europe's highest court, the Court of Justice of the European Union (CJEU), decided against it.
The heart of Meta's business model was challenged by the CJEU's ruling, which supported the authority of the German antitrust body to investigate privacy violations. The decision may give antitrust regulators greater discretion when investigating Big Tech firms.
Meta's case was a challenge in response to a 2019 decision from the German antitrust office that the social media juggernaut stop collecting user data without their permission, according to a Reuters report. The German government claimed that Meta's data acquisition methods amounted to an abuse of market dominance.
Upholding Fair Competition
A prevalent practice among large internet businesses, user data harvesting for behavioral advertising is the foundation of the business model of Meta. The tech giant led by Mark Zuckerberg disputed the ruling, which prompted a German court to consult the CJEU, which is based in Luxembourg, for advice.
An official from Meta responded to the CJEU's judgment, noting that the company is "evaluating" the decision of the EU's high Court and "will have more to say in due course."
The CJEU justices stressed that it might be necessary for a member state's competition authority to determine whether a company's behavior conforms with regulations other than those of competition law in antitrust investigations. The EU court emphasized that antitrust regulators must consider any inquiry or decision made by the appropriate supervisory body following relevant laws.
Read Also: Japan to Release Fukushima Water Waste into the Pacific Ocean
The director of the German cartel office, Andreas Mundt, praised the decision and said that data "is a significant aspect in building market dominance, per a report published by the New York Post. Under antitrust law, it is also possible for giant internet corporations to utilize customers' highly sensitive data abusively.
The judgment was welcomed as a milestone decision addressing data protection as a competition criterion by Benoit Coeure, the president of the French competition office.
To be cautious, Thomas Graf, a partner at the law firm Cleary Gottlieb, cautioned that antitrust authorities could need to defend the applicability of privacy legislation to antitrust investigations and provide evidence of misuse and restrictive consequences.
Meta Slapped with Epic Fine
Businesses that target or collect data from EU residents must comply with the GDPR's privacy and security obligations.
In May, due to the transfer of user data from Europe to the United States, violating European privacy regulations, the European Union slapped Meta with a record-breaking $1.3 billion fine. All transfers of personal data from users in the EU and the EA to the US have been halted by the decision of the Irish Data Protection Commission, a significant GDPR regulator, according to The Washington Post.
The GDPR, which places restrictions on how businesses may handle personal data, was determined to have been broken by Meta's data transfers. The amount surpasses the previous record established by Amazon in 2021 as the most significant GDPR penalty levied by the European Union.
Meta has said that it would contest the penalty.
Related Article: AI Shakes Up Tech Industry With Layoffs, Shifts in Workforce Strategy
