Germany’s abuse of dominance finding against Facebook stretches existing antitrust laws, contradicts the requirements of article 102 and undermines the single economic entity doctrine, a lawyer at the social media company has said. Tom Madge-Wyld at GCR Live TMT
Timothy Lamb, competition counsel at Facebook, assailed the competition authority’s investigation as “a data protection case with a thin veneer of competition law principles applied.”
Germany’s competition authority issued its findings against Facebook in December 2017, accusing the social media company of abusing its dominant position by amassing user data from other apps and websites and merging it with users’ Facebook profile data to target advertising.
Lamb said today that the Bundeskartellamt probe “has stretched fairly well-established principles of competition law to a point where they don’t reflect, I think, what we would automatically assume them to be.”
He criticised the German competition authority’s theory of harm, which he said “contradicts” the requirements of EU law to establish a causal link between the alleged dominance and the alleged cases of exploitative abuse.
“It is instructive that actually the Bundeskartellamt – in the work we’ve seen – has not tried to establish the necessary link between the dominant position and alleged abuse,” Lamb said.
He argued that no such causal link exists in this case, as the data protection terms being investigated – and the substance of those terms – have never changed, irrespective of the market position that Facebook has held in Germany. Facebook’s terms are broadly similar to those imposed by its rivals, Lamb said, which further undermines the idea of any causal link.
Instead, the German enforcer is effectively arguing that an alleged freestanding infringement of data protection law amounts to an infringement of antitrust law, solely because the conduct was carried out by a company with a sizeable market position and that market position itself affected the market, Lamb said.
“Its sufficient for the Bundeskartellamt for there to be a link between Facebook’s market position and the effect on the market,” he said. “The broadness and the implication of that absence of a causal link is significant and I think it takes us away from a fairly established principle of antitrust law.”
Any infringement of a law by a company with a sizeable market or dominant position could potentially trigger the abuse of dominance threshold relied upon by the German enforcer in the Facebook probe, which is “a very broad basis” to take on a case, Lamb warned. He said the German enforcer appears to want to be a general supervisory agency looking to address any infringement of law by dominant companies.
The competition authority’s approach also undermines the single economic entity doctrine, Lamb said, by scrutinising the combination of data that is generated on Facebook with data that is generated through its wholly owned subsidiaries WhatsApp and Instagram. Competition law typically would not be concerned about such activity within a single corporate group, he said.
“When you look at that affiliate sharing concern that the Bundeskartellamt had, that is when you realise that in reality this is a data protection case with a thin veneer of competition law principles applied,” Lamb said.
If taken as a precedent, this approach will have significant implications beyond Facebook, affecting large appliance makers who work with smart devices, financial services and postal service companies that have terms and conditions that allow for the sharing of data between their affiliates, he said.
Ultimately, he said, competition and data protection laws serve fundamentally different aims.
“I don’t think that means you can rule out touch points between the two. I think anyone who rules out touch points is being a bit too absolutist,” Lamb said. “But the Bundeskartellamt case is not one of those touch points.”
Lamb spoke on a panel considering antitrust and other policy goals for telecoms, media and technology companies. Moderated by Helen Jenkins at Oxera, the panel also featured Munesh Mahtani, a senior competition counsel at Google; Andrea Appella, deputy general counsel for Europe and Asia at 21st Century Fox; and Eric Lipman, senior litigation counsel for antitrust and competition at Uber.
The GCR Live Telecoms, Media and Technology conference in London concluded today.