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Facebook’s use of personal data and privacy settings ruled illegal by German court

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Facebook’s default privacy settings and use of personal data are against German consumer law, a judgement handed down by a Berlin regional court said.

The court found that Facebook collects and uses personal data without providing enough information to its users for them to provide meaningful consent. The company’s “authentic name” policy – a revision of a rule that once required users to use their “real names” on the site, but which now allows them to use any names they are widely known by – was also ruled unlawful. According to the ruling, users must be allowed to sign up for the service under pseudonyms to comply with a decade-old privacy law.

According to a report on Reuters, the Federation of German Consumer Organisations (vzvb), which brought the suit, said that Facebook’s default settings and some of its terms of service were in breach of consumer law.

The verdict, from a Berlin regional court, comes at a time when Internet companies face increasing scrutiny in Germany and the rest of Europe over their handling of personal data, specifically pertaining to targeted online advertising.

“Facebook hides default settings that are not privacy-friendly in its privacy center and does not provide sufficient information about it when users register,” Heiko Duenkel, litigation policy officer at the vzvb said in a release. “This does not meet the requirement for informed consent.”

The court also ruled eight clauses in the platform’s terms of service to be invalid, including terms that allow Facebook to transmit data to the US and use personal data for commercial purposes.

The vzbv did not succeed in its argument against Facebook’s claim that it is for free. The association said, “Consumers do pay to use Facebook. Maybe not in euros, but with their data. And this data is extremely valuable to the company.” The Berlin Regional Court found Facebook’s claim was lawful because intangible consideration cannot be regarded as a cost.

Facebook to appeal verdict

Facebook said it would appeal, even though several aspects of the court judgment had been in its favour. In a statement, it said it had already made significant changes to its terms of service and data protection guidelines since the case was first brought in 2015.

“We are working hard to ensure that our guidelines are clear and easy to understand and that the services offered by Facebook are in full accordance with the law,” a Reuters report quoted Facebook.

In the meantime, Facebook said it would update its data protection guidelines and its terms of service so that they comply with new European Union-wide rules that are due to enter force in June.

Our Take

The German court’s ruling revolves around the issue of “informed consent.” By signing up Facebook’s users agree to a set of terms and conditions about the usage of their personal data, the platform also allows users some degree of control over their privacy settings. But the platform does not provide users sufficient information regarding their privacy settings in an accessible manner. The user has to crawl through multiple pages/menus before they can alter the usage of their personal data by Facebook.

The other issue in focus is Facebook’s “authentic name” policy that requires people to use their real names (excluding very specific cases). This policy has been ruled as unlawful. Facebook has asserted that “authentic identity is important to the Facebook experience, and our goal is that every account on Facebook should represent a real person.” The main issue with anonymous accounts is the ease with which they can be used for trolling and abusive behaviour, the problem that seriously afflicts Twitter. But the real name policy has not stopped the proliferation fake accounts either, in its latest annual report the company stated that 10% of it’s 2.13 billion monthly active users are either duplicate or fake accounts.

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