BGH Facebook Decision on Data and Dominance

What the BGH Facebook decision held

In the BGH Facebook decision of 23 June 2020 (KVR 69/19), the antitrust senate of the Federal Court of Justice allowed the Federal Cartel Office (Bundeskartellamt) to enforce its prohibition of Facebook's data processing terms while the appeal on the merits was pending. The court found no serious doubts that Facebook was dominant on the German market for social networks or that it abused that position under § 19(1) of the Act against Restraints of Competition (GWB) by using terms that combined users' off-Facebook data with their Facebook accounts without giving them a choice.

The decision was issued in interim proceedings, but its reasoning, published in the court's press release No. 080/2020, set out a distinctive theory of harm for data-driven platforms.

Notably, the BGH did not base its decision primarily on the GDPR, as the Bundeskartellamt had done. Instead, it focused on the fact that users had no choice between a more personalised service based on off-Facebook data and a service personalised only on data they disclosed on Facebook itself. This "imposed extension of services" was abusive, in the court's view, because the lack of choice exploited users who could not switch to competitors because of strong lock-in effects, and because the larger data basis further entrenched Facebook's position.

Background of the interim proceedings

By decision of 6 February 2019, the Bundeskartellamt prohibited Facebook and other group companies from using terms that made the private use of the network conditional on the processing of user and device data generated outside facebook.com, including through other group services such as Instagram and WhatsApp and through Facebook Business Tools on third-party websites, without further consent. The authority reasoned that Facebook was dominant and that its terms breached GDPR principles, which it used as a benchmark for abuse.

Facebook appealed to the Higher Regional Court of Düsseldorf. On Facebook's application, the court ordered the suspensive effect of the appeal under § 65(3) GWB because it had serious doubts about the legality of the decision, which meant the prohibition could not be enforced until the appeal was decided. The Bundeskartellamt appealed that interim order to the BGH.

The reasoning of the BGH Facebook decision

The BGH set aside the Düsseldorf order and rejected the application for suspensive effect. It held that there were no serious doubts about Facebook's dominance on the German market for social networks or about the abusive nature of the terms. The decisive point was not whether the processing complied with the GDPR, but that the terms left private users no choice whether to use the network with more intensive personalisation, involving potentially unlimited access to their off-Facebook internet use, or to agree only to personalisation based on data they disclosed on facebook.com.

The court described Facebook as active on two markets: providing a platform for users to present themselves and communicate, and providing advertising opportunities that finance the free service.

As a dominant network operator, Facebook bore a special responsibility for maintaining remaining competition, taking into account the economic importance of access to data. The lack of choice affected users' personal autonomy and their right to informational self-determination, also protected by the GDPR. Against the background of high switching barriers, it also amounted to exploitation relevant under competition law, because competition could no longer perform its control function. According to the authority's findings, a significant share of users wanted to disclose less personal data, and in a functioning market an offer meeting this demand would be expected.

The terms were also capable of impeding competition. Although Facebook's position rested mainly on direct network effects, access to data was an important competitive parameter both on the advertising market and on the social network market. The larger data basis intensified lock-in effects and improved Facebook's ability to finance the network through advertising, which in turn affected competition for advertising contracts.

Free services and market definition in the BGH Facebook decision

One of the conceptual challenges in the case was that private users pay no money for the social network. Traditional competition analysis focuses on prices; for free services, the "price" users pay consists of attention and data. German law had already been amended in 2017 to clarify, in § 18(2a) GWB, that the assumption of a market is not invalidated by the fact that a service is provided free of charge.

The BGH Facebook decision built on this by treating the scope of data that users must provide as a relevant condition of the service, comparable to a price or quality term, and by recognising that users who wanted to disclose less data had no alternative because of Facebook's dominance.

The court's two-sided view of the platform, with users on one side and advertisers on the other, also shaped the analysis of effects. Data collected from users improves targeting on the advertising side, which strengthens the platform's revenues and reinforces its position on the user side. This feedback loop is typical of many digital platforms, from marketplaces to app stores and search engines, and explains why authorities look closely at data combination practices across services.

A new emphasis on exploitative abuse

Competition authorities traditionally pursue exclusionary conduct, which harms competitors, more often than exploitative conduct, which harms customers directly. The BGH Facebook decision gave fresh weight to exploitative abuse in digital markets. It recognised that imposing conditions on users that they would not accept in a competitive market can be abusive in itself, and that the protection of users' autonomy can be part of the competition law assessment. At the same time, the court required a careful assessment of competitive effects and a balancing of interests oriented towards the function of competition law, rather than treating any regulatory breach by a dominant company as an abuse.

Implications for data-driven business models

For businesses beyond the largest platforms, the BGH Facebook decision offers guidance on how authorities may view data practices of companies with market power. Combining data from different services, tracking users on third-party websites and making service access conditional on broad consent are practices that may attract scrutiny where users have no realistic alternatives.

Companies can reduce risk by offering tiered choices, for example a basic service with limited data use and an optional enhanced service, and by documenting the reasons for their data practices and their benefits for users. Where a company relies on consent, the CJEU's later guidance on the voluntariness of consent given to dominant providers must also be considered.

What happened next

The interim decision was followed by the main proceedings before the Düsseldorf court, which referred questions on the interplay between competition law and the GDPR to the Court of Justice of the EU in March 2021. In its judgment of 4 July 2023 in Meta Platforms v Bundeskartellamt (C-252/21), the CJEU confirmed that competition authorities may examine GDPR compliance when assessing abuse, subject to cooperation with data protection authorities, and gave detailed guidance on the GDPR legal bases.

According to the Bundeskartellamt, the Facebook case was concluded in 2024 with measures giving users better options for combining their data, and its decision became final. Our note on Meta v Bundeskartellamt covers the CJEU judgment.

The legacy: § 19a GWB and the Digital Markets Act

The BGH Facebook decision coincided with legislative change. The 10th amendment to the GWB, in force since January 2021, introduced § 19a GWB, which allows the Bundeskartellamt to designate undertakings of paramount significance for competition across markets and to prohibit specific practices, including making the use of services conditional on the processing of data from other services without sufficient choice. Several large digital companies have since been designated by the authority. At EU level, the Digital Markets Act contains a comparable obligation for designated gatekeepers not to combine personal data across core platform services or with third-party services without the user's consent.

The idea that users must be given a genuine choice about data combination, central to the BGH's reasoning, has thus become part of statutory regulation for the largest platforms. For other dominant companies, the general abuse prohibition and the case law remain the relevant standard.

Lessons for businesses

• Data practices can be examined under competition law, not only by data protection authorities.
• For dominant companies, the absence of user choice over data combination can be abusive, even independently of GDPR compliance.
• Lock-in effects and switching barriers strengthen the case for exploitation.
• Access to data is a competitive parameter that authorities and courts weigh when assessing market power.
• Interim proceedings matter: enforcement of a decision can begin long before the merits are decided.

Procedural lessons from the interim proceedings

The case also illustrates the procedural framework for challenging Bundeskartellamt decisions. Appeals against decisions of the authority go to the Higher Regional Court of Düsseldorf and, on points of law, to the BGH. An appeal does not automatically suspend a prohibition decision; the court can order suspensive effect under § 65(3) GWB, for example where there are serious doubts about the legality of the decision.

The BGH's willingness to review and overturn such an interim order, and to state its views on the merits in doing so, shows that interim proceedings can effectively decide the commercial outcome of a case, because the company must comply while the main proceedings continue for years. Companies facing a prohibition decision should therefore prepare their compliance options in parallel with their appeal strategy from the outset, including how they would implement the decision if no suspension is granted.

How TRW & Co helps

We advise companies on competition law in digital markets, including abuse of dominance, § 19a GWB and the Digital Markets Act, and on the interface with data protection law. We represent clients in proceedings before the Bundeskartellamt and the courts and design data practices and user choice mechanisms that reduce regulatory risk. Our work connects with our antitrust and digital platforms practices; see also our notes on § 19a GWB and the Digital Markets Act. Please contact us to discuss your situation. This briefing is general information, not legal advice.