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The Italian Council of State on the Antitrust v. Facebook – 1

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The Italian Council of State on the Antitrust v. Facebook – 1

The first round of the Italian antitrust (“AGCM”) litigation case against Facebook, started on 6 April 2018 to challenge alleged unfair commercial practices implemented by the social provider in the use of personal data of its users / consumers, has come to a conclusion.

The Council of State (“CdS”) ruled with a sentence of 29 March 2021, combining the appeals received for opposite reasons from AGCM and Facebook (“FB”); with this decision, the CdS rejected both appeals, thus confirming the sentence of the Lazio Regional Administrative Court (“TAR”) No. 260 of 2020 which, in turn, had been called by FB to rule on the sanctioning provision of the authority.

Summary

Italian Antitrust (AGCM)-Facebook litigation process
Figure 1 – The long path of the ongoing dispute between AGCM and Facebook.

 

TAR decision n. 260/2020

With decision no. 260/2020, the Lazio Regional Administrative Court had confirmed:

  • the fine of € 5 million imposed by AGCM to FB for misleading practice (consisting in having misleadingly made users believe that registration on the social network was free rather than compensated for by the commercial exploitation of personal data provided by users)
  • the obligation to publish an amending statement that remedies the aforementioned information asimmetry.

The TAR’s decision had instead annulled the second sanction of the same amount, imposed by the AGCM for alleged aggressive practice found by the authority in the adoption by FB of a pre-selected mechanism of generalized authorization for the sharing of users’ personal data, to commercial purposes, with other platforms / apps of unidentified third parties. Instead of being able to express an active and positive will regarding this practice, users were only allowed to oppose (opt-out) by deselecting the authorization, to be carried out in multiple contexts and in a difficult way.

The TAR, in disagreement with the AGCM, had found that the collection of consent did not take place automatically through the FB platform, but following a series of interactions between the same and the user, an operation that allowed the latter to be aware of the proposed use of their data as well as to oppose of the same use for commercial purposes. Hence the rejection of the accusation of alleged aggression of FB’s commercial conduct.

Appeals to the CdS

Since both AGCM and FB were partially unsuccessful in the decision of the TAR, both had appealed to the Council of State for the reform of the decision of the administrative court in the part in which the same TAR had not accepted the respective requests of each party, that is: 

  • for AGCM, the request for rejection of the exclusion decided by the TAR of aggressive practice and the cancellation of the consequent penalty of € 5 million. 
  • for FB, the rejection of the assessment, again by the TAR, of the misleading practice and the annulment of the consequent sanctions of € 5 million and publication of the amendment declaration; both sanctions confirmed by the same court.

Since the two appeals were brought against the identical first-degree decision, the Council brought them together and decided in a single procedural context, also “in order to prevent the possibility of a conflict between judgements“.

According to the Council of State, FB made commercial use of users’ personal data and carried out a misleading commercial practice by omitting this aspect and, indeed, by declaring that the social service would be free.

About the accusation of aggressive practice, on the other hand, the CdS considered that the Antitrust authority has fallen into contradiction by acknowledging, without contesting it, the assertion of FB that its platform did not collect the user’s consent and, therefore, excluding the concrete possibility of an aggressive mode.

Further provisions of the AGCM

As reported before, pending the judgment before the CdS, AGCM carried out a subsequent investigation into compliance with the decision of the TAR – immediately enforceable – by Facebook. 

At the conclusion of the same, the authority imposed two further penalties for a total amount of € 7 million as it found that FB continued the misleading practice – by not providing clear and complete information to consumers about the use of their personal data – and had not yet complied with the obligation to publish the corrective declaration aimed at remedying the disputed information asymmetry.

It is not known whether this second decision of the authority was also challenged before the TAR.