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Meta’s Facebook has suffered a further setback in the way it uses personal data for online advertising after the EU’s top court ruled that competition regulators are allowed to probe whether companies comply with privacy rules.
The EU’s Court of Justice in Luxembourg said on Tuesday that Germany’s cartel office was right to use its powers in 2019 to block Facebook from combining data from its site with that on WhatsApp, without user consent, to target people with ads.
“A national competition authority can find, in the context of the examination of an abuse of a dominant position, that the [general data protection regulation] has been infringed,” the court said in a statement on Tuesday, in reference to the bloc’s privacy rules.
The court also said that in these circumstances competition authorities had to co-operate with each other.
Experts say the ruling marks a significant step towards enhancing the powers of antitrust regulators in the bloc to go after the business models of some of the largest tech companies such as Meta and Google over the way they handle the troves of data they collect.
Facebook appealed the 2019 decision on the grounds that the German regulator was mixing privacy law with antitrust rules. Subsequently, a court in Düsseldorf temporarily allowed the tech giant to pool the data until a final ruling on the appeal.
But in June 2020, Germany’s highest civil court ruled that it must follow an order from the antitrust watchdog. This ruling required Facebook to make significant changes in how it handles users’ data.
A court in Germany then sought the views of the EU courts over whether antitrust regulators could also include the use of data in the scope of their probes tackling anti-competitive abuses.
On Tuesday, the ruling said that “the personalised advertising by which the online social network Facebook finances its activity, cannot justify . . . the processing of the data at issue, in the absence of the data subject’s consent”.
Separately, the EU has proposed a new law that would allow regulators to share information about fines earlier in any investigation into a privacy breach.
“This will facilitate consensus-building and reduce the likelihood of disagreements,” said a document shown to the Financial Times. This comes after a dispute over how much Meta should have been fined for privacy breaches by regulators.
“We are evaluating the court’s decision and will have more to say in due course,” said Meta.