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

Wolfgang Kerber () and Karsten K. Zolna ()
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Wolfgang Kerber: University of Marburg
Karsten K. Zolna: University of Marburg

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

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.

Keywords: competition law; Facebook; digital platforms; privacy; data protection law (search for similar items in EconPapers)
JEL-codes: K21 K24 L40 L50 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2021
New Economics Papers: this item is included in nep-com, nep-law and nep-pay
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