According to the European Court of Justice, competition watchdogs can evaluate whether businesses like Facebook abide by the severe privacy laws of the continent, which are often implemented by national data privacy regulators.
The court held that when determining whether cyber behemoths are abusing their market dominance by shutting out rivals, antitrust authorities may consider any violations of data privacy laws.
Facebook parent company Meta stated in a statement, “We are studying the court’s ruling and will have more to comment in due course.
The court supported a German antitrust decision from 2019 that threatened to
upend Meta’s business model of selling ads targeted to users based on data gleaned from how they spend time on its services.
Meta, which also owns Instagram and WhatsApp, appealed that finding, which led German authorities to seek an opinion from the Court of Justice, the 27-nation bloc’s top tribunal.
Tuesday’s decision could pave the way for stricter scrutiny of tech companies. Europe has taken a pioneering role in reining in the power of big digital platforms with sweeping new standards taking effect next month and rules in the works on artificial intelligence.
The German Federal Cartel Office, or Bundeskartellamt, wasn’t contesting the company’s use of customer data to target ads to users on Facebook.
But it said for the company to combine data from all the services it runs to target ads more precisely, Facebook should have to first get permission separately from the other apps and websites to do so.
At issue is the way Facebook gains consent from users to process their data.
The corporation “cannot justify” citing “legitimate interest” as a justification for exploiting user data to display adverts, according to a press release summarising the court’s ruling. Users are required to voluntarily consent for the use of their data in accordance with European Union privacy laws.
The judgement made by the EU court would have “far-reaching effects on the business models of the data economy,” according to Andreas Mundt, head of the German Federal Cartel Office.