Facebook shares end higher as German court rules platform broke privacy laws

on Feb 13, 2018

Facebook shares ended in positive territory in the US Monday, amid news a German court recently ruled the social media platform has broken German privacy laws. On January 16, it was ruled German consumer rights group, Vzbv successfully argued that Facebook’s privacy settings don’t follow German law.

Facebook shares closed 0.17% higher at 176.41. However, after-hours activity currently has the Facebook stock in the red.

Facebook falls foul of German data laws

The Vzbv group reported Monday that its case against Facebook – which was initially brought in 2015 – had been partially successful. On January 16, a regional, Berlin-based court ruled that Facebook violates parts of the conditions of use and privacy against applicable consumer law.

The case brought by Vzbv was based on Germany’s Federal Data Protection Act. It states that data usage consent can only be granted if tech firms are clear about the nature of these data it gains and the reasons why they use that customer data.

The group successfully argued that Facebook’s pre-set privacy settings – which can be changed if users understand exactly what the default settings are – are naturally biased towards giving Facebook access to private data without making it clear to users.

“Facebook hides data protection-unfriendly presets in its privacy center, without sufficiently informing it during registration,” says Heiko Dünkel, Legal Officer at vzbv. “That's not enough for informed consent.”

Facebook to appeal decision

Facebook said in a statement, according to the BBC, that it plans to appeal the decision which has just been made public by Vzbv.

“We are reviewing this recent decision carefully and are pleased that the court agreed with us on a number of issues,” Facebook said in a statement.

“Our products and policies have changed a lot since this case was brought, and further changes to our terms and data policy are anticipated later this year in light of upcoming changes to the law,” Facebook added.

Vzbv said it would also appeal some areas of the court’s ruling, including its complaint that Facebook said it was a ‘free’ app. Vzbv said users pay Facebook with their data, but the court disagreed.