A Theory of Regulation of Exploitative Abusive Behavior on Online Platforms: The Facebook Case(German Federal Cartel Office Decision)(2021.6)

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SHIBATA, Junko(Professor, Faculty of Law, Kagawa University and Visiting Researcher of the Competition Policy Research Center)
TOJO, Yoshizumi(Professor, College of Law and Politics, Rikkyo University and Visiting Researcher of the Competition Policy Research Center)

Abstract
As a case in which a violation of competition law against Facebook was alleged, we examined the legal issue of exploitative and abusive behavior regarding terms and conditions of trade in German law by referring to the decision of the German Federal Cartel Office, the decision of the Düsseldorf Court of Appeal, and the decision of the Supreme Court in Germany. The case concerned, in particular, the legality of integrating user data from the Facebook social network with data acquired through visits to Instagram, WhatsApp belonging to the same corporate group as well as third-party Internet sites. A distinctive feature of the case is that it raised the issue of how the disposal of personal data without consent should be viewed in relation to data protection and competition law. The functioning of competition in the data market depends on whether or not the data subject, the user, has given consent for the disposal of his or her data as an autonomous decision after obtaining the appropriate information as originally intended by the data protection law. The informational gap that exists between individual users and DPFs with dominant positions such as Facebook, and the fact that consumer behavior is subject to limited rationality, a phenomenon known as the privacy paradox, place limits on the consent-based institutional design that constitutes the principle of data protection law. In particular, where consumers have no choice but to consent in order to use a service supplied by the DPFs, it is difficult to expect voluntary consent from users, and in such cases, the Facebook case indicates that regulation by competition law against the abuse of a dominant position is possible and useful. 　In the Supreme Court's decision, it was not the lack of consent in violation of data protection laws per se that was held to be a violation of competition law, but rather the lack of a "genuine or voluntary choice" for users to refuse to consent to the use of their data from off Facebook without being subjected to detriment that is at the core of the act of abuse of a dominant position. In other words, an individual user's freedom of choice is a precondition for the right of self-determination. Restriction of the right of self-determination with respect to one's own data in a situation where freedom of choice is not ensured can be a matter of competition law.The GDPR, which is a data protection law, and the GWB, which is a competition law, find common ground in the objective of protecting individual freedom of activity and freedom to determine market-related factors and, accordingly, the private fundamental rights position in economic activity. If we consider that the restriction of the right of self-determination over the disposal of one's own data in the process of economic transactions interferes with the economic autonomy in transactions of private users who appear as consumers, we can find a common ground with "infringement of the foundation of competition," which is regarded as an abuse of a dominant position in Japanese law. Here, the possibility of switching the transaction to another trading partner is also a common criterion. The right to determine one's own information in an economic sense can be taken to be included as one of the elements constituting the foundation of competition, and especially for private users who are consumers, stronger protection is considered to be necessary in this respect.

Abstract

　As a case in which a violation of competition law against Facebook was alleged, we examined the legal issue of exploitative and abusive behavior regarding terms and conditions of trade in German law by referring to the decision of the German Federal Cartel Office, the decision of the Düsseldorf Court of Appeal, and the decision of the Supreme Court in Germany. The case concerned, in particular, the legality of integrating user data from the Facebook social network with data acquired through visits to Instagram, WhatsApp belonging to the same corporate group as well as third-party Internet sites. A distinctive feature of the case is that it raised the issue of how the disposal of personal data without consent should be viewed in relation to data protection and competition law. The functioning of competition in the data market depends on whether or not the data subject, the user, has given consent for the disposal of his or her data as an autonomous decision after obtaining the appropriate information as originally intended by the data protection law. The informational gap that exists between individual users and DPFs with dominant positions such as Facebook, and the fact that consumer behavior is subject to limited rationality, a phenomenon known as the privacy paradox, place limits on the consent-based institutional design that constitutes the principle of data protection law. In particular, where consumers have no choice but to consent in order to use a service supplied by the DPFs, it is difficult to expect voluntary consent from users, and in such cases, the Facebook case indicates that regulation by competition law against the abuse of a dominant position is possible and useful.

　In the Supreme Court's decision, it was not the lack of consent in violation of data protection laws per se that was held to be a violation of competition law, but rather the lack of a "genuine or voluntary choice" for users to refuse to consent to the use of their data from off Facebook without being subjected to detriment that is at the core of the act of abuse of a dominant position. In other words, an individual user's freedom of choice is a precondition for the right of self-determination. Restriction of the right of self-determination with respect to one's own data in a situation where freedom of choice is not ensured can be a matter of competition law.The GDPR, which is a data protection law, and the GWB, which is a competition law, find common ground in the objective of protecting individual freedom of activity and freedom to determine market-related factors and, accordingly, the private fundamental rights position in economic activity. If we consider that the restriction of the right of self-determination over the disposal of one's own data in the process of economic transactions interferes with the economic autonomy in transactions of private users who appear as consumers, we can find a common ground with "infringement of the foundation of competition," which is regarded as an abuse of a dominant position in Japanese law. Here, the possibility of switching the transaction to another trading partner is also a common criterion. The right to determine one's own information in an economic sense can be taken to be included as one of the elements constituting the foundation of competition, and especially for private users who are consumers, stronger protection is considered to be necessary in this respect.

A Theory of Regulation of Exploitative Abusive Behavior on Online Platforms: The Facebook Case(German Federal Cartel Office Decision)(2021.6)

A Theory of Regulation of Exploitative Abusive Behavior on Online Platforms: The Facebook Case(German Federal Cartel Office Decision)(2021.6)

SHIBATA, Junko(Professor, Faculty of Law, Kagawa University and Visiting Researcher of the Competition Policy Research Center) TOJO, Yoshizumi(Professor, College of Law and Politics, Rikkyo University and Visiting Researcher of the Competition Policy Research Center)

SHIBATA, Junko(Professor, Faculty of Law, Kagawa University and Visiting Researcher of the Competition Policy Research Center)
TOJO, Yoshizumi(Professor, College of Law and Politics, Rikkyo University and Visiting Researcher of the Competition Policy Research Center)