In a significant ruling, the European Court of Justice (CJEU) has affirmed the power of antitrust authorities to investigate privacy breaches, thereby delivering a blow to Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp.
The decision grants antitrust regulators greater leeway in scrutinizing Big Tech firms, potentially shaping the future landscape of data protection and competition within the European Union (EU).
Understanding the CJEU Ruling
Antitrust Agencies and Data Protection Concerns:
The case originated from a 2019 order issued by the German cartel office, which compelled Meta to halt the collection of users’ data without their consent, citing it as an abuse of market power. Meta challenged the order, leading the German court to seek guidance from the CJEU.
The CJEU ruling clarifies the boundaries of antitrust agencies’ jurisdiction by addressing the question of whether these agencies overstepped their authority by employing antitrust powers to tackle data protection concerns, which typically fall under the purview of national data protection authorities.
Reactions to the Ruling:
In response to the ruling, a Meta spokesperson stated that they are currently assessing the decision and will provide further comments in due course. This outcome has significant implications for Meta and other tech giants, as it signals that antitrust regulators now possess the authority to investigate potential privacy breaches and impose penalties accordingly.
The CJEU judges emphasized that, during antitrust investigations, it might be necessary for competition authorities to assess a company’s conduct to ensure compliance with regulations beyond those related solely to competition law. However, the court also stressed the importance of antitrust regulators taking into account any decisions or investigations conducted by relevant supervisory authorities concerning data protection.
Support for the Ruling:
The German cartel office welcomed the CJEU ruling, with its head, Andreas Mundt, underscoring the vital role of data in establishing market power. Mundt argued that the utilization of consumers’ highly personal data by large internet companies can also be regarded as an abuse under antitrust law. This perspective supports the notion that data protection is an integral component of competition in the digital economy. Andreas Mundt, President of the Bundeskartellamt: “The judgment sends a strong signal for competition law enforcement in the digital economy, a field where data are decisive for market power. When large internet companies use the very personal data of consumers, this usage can also be deemed abusive under competition law.”
Legal Perspectives and Potential Challenges:
While the ruling grants antitrust authorities additional authority in addressing data protection concerns, legal experts urge caution and emphasize the need to substantiate the relevance of privacy law to antitrust cases. Thomas Graf from Cleary Gottlieb law firm highlighted the requirement to demonstrate restrictive effects and abuse, as well as the necessity of coordinating with the General Data Protection Regulation (GDPR) authorities.
Graf also questioned whether antitrust authorities would assume the role of GDPR regulators, suggesting that the two spheres of oversight may remain distinct entities.
Broader Implications:
Privacy activist Max Schrems, known for his legal actions against Meta, expressed optimism regarding the ruling, suggesting that it would have a positive impact on his pending litigation with the company. This outcome reinforces the importance of data protection as a competitive parameter within the digital marketplace.
The European Consumer Organisation (BEUC) voiced its support for the ruling, highlighting the significance of considering data protection within the complex digital economy of today. This position reflects a growing recognition of the intertwined nature of competition and privacy in the digital age.
