Facebook must comply with an order by Germany's competition watchdog to curb data collection from users, a top German court ruled yesterday in a setback for the US social network company that could set a wider precedent.
The German Federal Court's stay order, which suspends a decision by a lower court, backs the Federal Cartel Office's view that Facebook abused its market dominance to gather information about users without their consent.
Lead judge Peter Meier-Beck, explaining the decision, said there was no serious doubt Facebook had a dominant market position in Germany, nor that it had abused terms and conditions banned by the cartel office.
"Facebook must give users the choice to reveal less about themselves - above all what they reveal outside of Facebook," Meier-Beck.
Welcoming the ruling, cartel office president Andreas Mundt said it showed "if data are collected and exploited illegally, it should be possible to take anti-trust action to prevent the abuse of market power".
Facebook said: "We will continue to defend our position that there is no anti-trust abuse. There will be no immediate changes for people or businesses who use our products and services in Germany."
Legal experts said the ruling could have wider ramifications, because Germany is the first country to explore whether data dominance is a competition issue.
"The cartel office is attempting to tame the tech giants and to stop the build-up of economic power through integration of data to 'super profiles'," said Rupprecht Podszun at the Institute for Competition Law at Heinrich Heine University in Dusseldorf. "This is something new in terms of anti-trust law."
The cartel office had objected to how Facebook pools data on people from third-party apps, including its own WhatsApp and Instagram, and online tracking of people who do not have accounts via Facebook "like" or "share" buttons.