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The German Facebook Case: The Law and Economics of the Relationship between Competition and Data Protection Law

Author

Listed:
  • Wolfgang Kerber

    (University of Marburg)

  • Karsten K. Zolna

    (University of Marburg)

Abstract

Can competition law also take into account effects on privacy or should privacy concerns of data-collecting behaviour only be dealt with by data protection law? In this paper we are analysing the German Facebook case, in which certain terms of service (that force consumers to give consent for merging personal data collected through Facebook services with those collected from tracking and third-party websites) were prohibited as exploitative abuse of a dominant firm. We show from an economic perspective that due to the simultaneous existence of two market failures (market dominance, information and behavioral problems) and complex interaction effects between both market failures and both policies in digital markets, the traditional approach of a strict separation of both policies is not possible any more, leading to the need for more collaboration and alignment of both policies. With respect to the substantive question of protecting a minimum level of choice options for consumers regarding personal data vis-a-vis dominant digital platform firms, the recent decision of the German Federal Court of Justice in the Facebook case and the proposed Digital Market Act have opened new perspectives for dealing with privacy concerns in competition law and regulation.

Suggested Citation

  • Wolfgang Kerber & Karsten K. Zolna, 2021. "The German Facebook Case: The Law and Economics of the Relationship between Competition and Data Protection Law," MAGKS Papers on Economics 202114, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:202114
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    competition law; Facebook; digital platforms; privacy; data protection law;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K24 - Law and Economics - - Regulation and Business Law - - - Cyber Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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