In a significant blow to Meta Platforms [META:US], the top court of the European Union has upheld the power of Germany’s antitrust watchdog to investigate privacy breaches, thereby challenging Meta’s core business model, as reported by Reuters on July 4. The Luxembourg-based Court of Justice of the European Union (CJEU) ruling could potentially grant antitrust authorities greater flexibility in scrutinizing Big Tech companies. The case revolved around the German cartel office’s 2019 order, which instructed Meta to cease collecting user data without explicit consent, deeming it an abuse of market dominance. The central issue was whether the German antitrust agency had exceeded its jurisdiction by employing antitrust powers to address data protection concerns, which typically fall under the purview of national data protection authorities. Meta, the parent company of Facebook, Instagram, and WhatsApp, contested the ruling, leading a German court to seek guidance from the CJEU.

In response to the verdict, a spokesperson for Meta stated that they were evaluating the court’s decision and would provide further comments in due course. The CJEU judges expressed that during antitrust investigations, it might be necessary for the relevant competition authority of a member state to assess whether the conduct of the company under scrutiny complies with regulations other than those pertaining to competition law. However, the CJEU also emphasized that antitrust regulators must take into account any decisions or investigations conducted by the competent supervisory authority according to relevant data protection regulations. The German cartel office welcomed the ruling, with its head, Andreas Mundt, stating that data plays a crucial role in determining market power, and the exploitation of consumers’ highly personal data by major internet companies could potentially constitute an antitrust violation. Benoit Coeure, head of the French competition agency, referred to the judgment as a landmark decision highlighting the relationship between data protection and competition. While some legal experts expressed caution about the involvement of antitrust authorities in privacy law, emphasizing the need to demonstrate restrictive effects and abuse, they acknowledged the necessity of coordination with GDPR authorities.

Sources:

https://www.reuters.com/technology/german-antitrust-watchdog-can-add-privacy-breaches-meta-probe-eu-court-says-2023-07-04/