FACEBOOK has scored a legal victory in Germany in a dispute with a local data watchdog after the court said the regulator based its order on German privacy law instead of Ireland's.
The administrative court for Schleswig-Holstein suspended enforcement of an order saying the social networking site must let users register under a pseudonym.
Facebook has been fighting orders from German regulators, arguing it's only subject to Irish law, which is generally less strict then German privacy rules.
Facebook Ireland, in Dublin, is responsible for all the Palo Alto, California-based company's users outside the US and Canada.
"The regulator wrongfully based its order on German data protection law," the judges said in the ruling.
"Irish data protection law exclusively applies," because Facebook handles the data in Ireland.
Thilo Weichert, the state regulator who issued the pseudonym order, said he will appeal the ruling. German law clearly backs his order, he said in a statement on his website.
Companies shouldn't be allowed to withdraw to a European member state with "low data protection standard," according to his statement.
It emerged in December that the data protection commissioner (DPC) here is facing legal action from an Austrian lobby group over how it manages Facebook's use of data.
'Europe versus Facebook' (EvF), a Vienna-based pressure group made up of mostly students, said it planned to go to court here to challenge how the DPC has dealt with privacy issues surrounding Facebook.
The group made a series of complaints to the DPC two years ago, and the commission, which has jurisdiction over Facebook because its European headquarters is based in Dublin, responded by conducting an audit of how the social network handles user data.
The commission, led by Billy Hawkes, made a number of recommendations to the company to change their procedures but they are not legally binding.
(Additional reporting by Reuters)