
Facebook: Questions
On 24 March 2021, the Cartel Senate of the Düsseldorf Higher Regional Court heard the case of Bundeskartellamt v. Facebook, case number VI Kart 2/19 [V]. The hearing ended spectacularly with the announcement of a referral to the European Court of Justice. Today, the specific questions to the ECJ were published. Rupprecht Podszun had a look at the referral and has also tried to find out what has happened since the hearing.
At the end of the Düsseldorf hearing on the Facebook case, after a long but not boring morning (you can read about it here), it was like in a page-turning novel: a cliffhanger! The Senate had decided that the case would be referred to the European Court of Justice.
The referral decision has been made available today (23 April 2021). In 7 questions and on 26 pages, the judges of the Düsseldorf Higher Regional Court spell out what they would like to know from their colleagues in Luxembourg. The questions all revolve around the interpretation of the GDPR. Questions 2-6 focus on data processing by Facebook. This shows what I had already sensed in the courtroom: the court is quite critical and does not consider registration with Facebook to be effective consent. It is about the definition of sensitive data according to Art. 9 of the GDPR, about the permission for data processing in Art. 6 I b and f of the GDPR and about this nice question:
“Can effective consent, in particular voluntary consent under Art. 4 No. 11 GDPR, within the meaning of Artt. 6 (1) (a), 9 (2) (a) GDPR, be declared vis-à-vis a dominant company such as Facebook Ireland?”
This touches the very foundations. Questions 1 and 7 are particularly tricky for the case before us. Question 1 is about whether the Bundeskartellamt is competent at all and may establish a breach of the GDPR – or whether there is a conflict with the system of jurisdiction in Art. 51 et seq. of the GDPR. The question has – in one sentence – 104 words. So, the Düsseldorf court has already adapted itself very nicely to the style of the ECJ. It may be debatable whether the specific wording is à point or not: The Senate asks whether the Federal Cartel Office may issue an order to remedy a violation of the GDPR (“this violation”). The Bundeskartellamt would probably rather say: We are stopping an infringement of competition law.
With Question 7, the judges ask in the alternative whether a possible GDPR infringement may be included in an assessment under antitrust law as a weighing factor. The answers to questions 1 and 7 are likely to set the course for the game.
The decision is relatively neutral in many parts. It has some juicy elements, though: It is stated that the Bundeskartellamt decision is unlawful in any case with regard to two out of three addressees. It also states that it is formally unlawful that Art. 102 TFEU was not examined (but that does not matter). And in passing, the Federal Supreme Court, the German Bundesgerichtshof, is also told once again why its opinion in the summary proceedings was not convincing.
I am particularly grateful for the latter. When today’s order is translated our dear non-German speaking readers get their own taste of how the Düsseldorf Court does not shy away from differing with the higher court (and they are very restrained in wording in this document).
Do we have a plan?
So, Luxembourg may deal with this. At the same time, everything is still open regarding implementation of the decision. Since the last week of March, the Federal Cartel Office has the power to demand that Facebook submits an “implementation plan”. This corresponds to point 3.c. of the operative part in the Bundeskartellamt’s decision of 6.2.2019 in the privacy/competition case:
“In order to put an end to the conduct prohibited in clauses 1 and 2, the parties 1-3, including their affiliated companies pursuant to Section 36 (2) of the ARC, are obliged to (…) c. within four (4) months, submit an implementation plan detailing the measures the parties intend to take to achieve the stop of the conduct as set out in point 3 and the steps and dates by which these measures will be implemented.”
The aim of such a plan should be that the authority and the company can enter into a conversation with each other to work out the details. (Here, by the way, one might think of the “regulatory dialogue” provided for in Art. 7 of the Digital Markets Act, an interesting parallel.)
In the courtroom, the impression was created that there would be clarity for everyone quickly: The very next day, the Office and Facebook wanted to reach an agreement on the further course of action, i.e.: enforcement (= submission of an implementation plan) or non-enforcement (= standstill declaration by the Office). In case of enforcement, Facebook still had the possibility to file another application for an order of suspensive effect.
The days after
The next day, I heard from both parties: Nothing. The day after that: Nothing. Then it was the weekend. And then came Enforcement Day: somehow I had expected the cavalry of the Bundeskartellamt to move out in those days before Easter to serve a first fine for non-implementation of the order. Alternatively, I could also imagine a mounted messenger from one of the three Facebook law firms bringing a bull to Bonn with a plan.
But since nothing happened, I asked Facebook, the Bundeskartellamt and the Düsseldorf court, the Oberlandesgericht, for information last week.
Guess who even responded?

Bingo: All of them. And promptly!
The press spokesperson of the Düsseldorf Higher Regional Court stated that the Senate had not yet finished working on the referral to Luxemburg (consider it done now, see above). And: no new application had been received from Facebook.
Okay, interesting!
Robin Koch, Policy Communications Director EU at Facebook, wrote:
“Thank you for getting in touch. We unfortunately can’t share any information with you on this matter at this point of time.”
The spokesperson of the Bundeskartellamt expressed himself in the same way, but in German, with a similar message: currently no comment.
This information is about a week old today (4/22/2021), I must confess.
Less is more
So what did we learn? Basically, nothing. Nothing! But nothing is of course more than nothing. Or as Rem Koolhaas, the architect of the new Springer building in Berlin and the CCTV headquarters in Beijing, once put it:
“When less is more, nothing may be everything.”
So is it all about everything already? Let’s try an educated guess: Facebook has not filed an application for an order of suspensive effect. It is hard to imagine the Bundeskartellamt issuing a binding declaration of non-intervention without providing any information about it. In this high-profile case, one would expect a notice to the public that the proceedings are at a standstill for the time being. If the agency simply did nothing, this would mean that the whole case would be completely on ice at least until the ECJ decision or even until it becomes legally binding in a few months‘ years’ time – despite the possibility of enforcement and a decision by the Bundesgerichtshof, the Supreme Court, backing the agency. Please note: The German legislator has provided that decisions by the Bundeskartellamt shall be immediately enforceable. It has not provided that the Bundeskartellamt shall wait until Judgement Day.

What is to conclude from this? This is pure speculation, but: I guess that there are talks going on between the Decision Division of the Bundeskartellamt and Facebook about the implementation of the requirements that the Bundeskartellamt had set up in its decision. That means: Facebook must have submitted something that looks like an implementation plan.
NOTE: We have created a separate page here with numerous resources on the Facebook case. We look forward to receiving further tips! In episodes 1, 6, 9 and 10, Facebook is also the topic of the German-language podcast “Bei Anruf Wettbewerb” with Justus Haucap and Rupprecht Podszun, which you can find on all podcast shelves and for example here.
This would leave eight months to implement any changes, starting at the end of March, unless the option is taken to negotiate a ready-made plan but to wait with implementation.
Facebook’s risk
What risk would Facebook take if it refused to submit a plan? This would violate a valid antitrust order. There could be considerable fines under Sections 81(2a) and 81c(1) and (2) of the German competition act. I recall that the EU Commission once demanded €2 million from GAFA-Plus candidate Microsoft when interoperability information was not disclosed – and that €2 million per day (see decision of 10.11.2005 in case 37.792).
In the meantime, GAFAs have apparently also recognised the risk they run politically from a stubborn refusal to cooperate. It seems to me – very cautious observation on my part – that it is becoming somewhat more fashionable to cooperate with authorities (or at least to pretend to do so – so-called “as-if cooperation”). A tough-minded attitude towards the authorities possibly gives a boost to the tougher Khans among regulators. The new German competition legislation with its Section 19a is a good example of this: If everyone had been as cooperative as Amazon was with division B2 in the Cartel Office, this provision would probably never have come into existence.
In the US, representatives of Apple and Google were just invited back to the Senate, where they were heckled over their app stores. The fact that Apple announced almost at the same time that it would better protect the privacy of users against advertising (at the price of making app developers even more dependent on the app store) was seen by some observers as a bad joke.
The risk of liability
The fact that the Bundeskartellamt may still be hesitant to enforce its own order is probably due to the risk of state liability. At least this was also pointed out by the court. How high is this risk? The principles for this under German law were set out by the 1st Cartel Senate of the Düsseldorf Higher Regional Court in 2014, then chaired by Professor Kühnen already, in a decision on the Phonak/GN Resound takeover (Case No. VI-U (Kart) 43/13). In the case at that time, the plaintiffs claimed more than 1 billion euros from the Federal Cartel Office, which had banned that merger of hearing aid manufacturers. In 2008, the Düsseldorf court had upheld the prohibition order of the Office, but the Bundesgerichtshof had overruled it in 2010 (so, the two courts disagreeing – this also happened more than ten years ago).

The Bundeskartellamt had therefore unlawfully prevented a merger. Is the German taxpayer liable? No, said the Düsseldorf Higher Regional Court at the time:
“The asserted state liability claim (§ 839 (1) sentence 1 BGB in conjunction with Article 34 GG) fails because the Bundeskartellamt officials cannot be accused of culpably breaching their official duties. (…) Not every objective error of law justifies an accusation of guilt. If the official’s legal opinion, arrived at after careful examination, can be regarded as legally defensible, then an accusation of guilt cannot be derived from the courts’ disapproval of this legal opinion.”
The OLG also argued in favour of justifiability that it had itself come to the conclusion that the Cartel Office had been correct.
The judgement makes it plain: In view of the importance of the matter and the position of the office, high demands are to be made on the conduct of business by the office, “a particularly thorough examination is possible and required”. At the same time, however, it is clear – and this is how the Higher Regional Court puts it – that not every procedure that is viewed differently by another instance can immediately give rise to claims for damages. This is what in German legal jargon we have a word for that every law student learns in her first year: “vertretbar”. It means: you may see it that way, but others may see it differently.
Chilling effects
The former chief economist of the Directorate-General for Competition, Tommaso Valletti, now a professor at Imperial College London, has just given Nicholas Shaxson an interview on this complex, which I would like to call “astonishing” with some understatement. Valletti candidly says that the Commission is virtually paralysed by fear of losing a case in the courts:
“There is stigma attached to losing cases in court, of having decisions reversed. The stigma is so bad that basically it freezes people from taking novel approaches.”
This is perhaps the true chilling effect in competition law: out of fear of losing in court, people prefer not to intervene at all. Valletti also says other interesting things that can easily be projected onto the Facebook case, especially about the role of economics. If his diagnosis is correct, however, it has to be said that it’s hard to imagine what kind of shock freeze the competition authorities would go into if they also had to constantly fear successful claims for damages.
Some readers may now suggest that in our times we already have enough government actors escaping any liability.
Sure, sure! However, liability cannot be based on the fact that different opinions are held on a legal issue, if the opinion held is not entirely absurd. Therefore, in the hearing aid case, the main complaint had been about improper fact-finding (dismissed by the court). In the Schneider Electric case (Case C-440/07 P), the ECJ had taken the line for European law that there must be a “sufficiently serious breach of a rule of law intended to confer rights on individuals”. In the recently decided BayWa case (a German case where the Bundeskartellamt allegedly invited some companies by phone to ask for leniency, but not others), the Regional Court of Bonn also indicated that it sees considerable hurdles to state liability (Case No. 1 O 201-20).
Harmony in sight?
So, where do we stand: We know the questions before the EU judges now. We do not really know where Facebook and the Bundeskartellamt stand in negotiations, but we may assume they are discussing. And our beloved courts?
A very frequent divergence of the case law of the two most important competition law senates – most recently, for example, again in a damages case concerning chipboard where the Düsseldorf court again refused to follow the lead of the BGH (Case U (Kart) 8/19) – may not be a particularly happy state of affairs. But it cannot be avoided: One must imagine the legal practitioners confronted with this happy.
Soon there will be the next chance that the BGH Cartel Senate and the 1st Cartel Senate of the OLG Düsseldorf will harmonize in an important digital case, but if I had to bet: I’m not betting on harmony. In May, the BGH will hear the case of narrow price parity clauses of Booking.com, which the OLG Düsseldorf – in contrast to the Bundeskartellamt – considered permissible. The OLG had classified these clauses as necessary ancillary restraints in an otherwise antitrust-neutral agreement between the booking portal and the providers of accommodation. Adrian Deuschle had once reported on this unexpected outcome here on the blog.

If the BGH Cartel Senate in Karlsruhe does not follow the path of ancillary restraints, the case should normally go back to the Düsseldorf senate since they only look into the law, not into facts at the Supreme Court. Since the Düsseldorf court had said that there is no violation of Art. 101 (1) TFEU, it had not even considered an exemption under Art. 101 (3). So, you would have to gather the facts for that assessment first… I sense potential for a new Düsseldorf-Karlsruhe thriller.
In the next German Facebook case we will spared denied this thriller. If the Bundeskartellamt decides on its first 19a-proceedings (subject matter is the Facebook virtual reality tool Oculus), the new Section 73 (5) of the German competition act will apply: if Facebook files an appeal, this appeal will directly rush on an express line from Bonn to Karlsruhe without a stop-over in Düsseldorf. The Supreme Court is the first and final legal instance.
PS: In the SSNIPpets, I had reported on Rebecca Kelly Slaughter’s (FTC) criticism of the courts. She has followed up again – this time it’s going against the U.S. Supreme Court.
Rupprecht Podszun is a director of the Institute for Competition Law at Heinrich Heine University Düsseldorf and he loves the Facebook case. The Facebook page of his chair is becoming less and less important, as the new generation of students no longer clicks there. Instead, there is now an Instagram page, which is maintained by his team.
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