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Germany Finds that Facebook’s Privacy Settings and Terms of Service Violate Their Privacy Rules: Data Privacy Trends

One of the things that Tom O’Connor and I discussed in last week’s webcast about the upcoming Europe General Data Protection Regulation (GDPR) was how consent will be interpreted for use of data for its data subjects.  Last month, a German court may have given an early indication of how consent will be enforced.

In Legaltech News (Facebook Foreshadowing: German Court Underscores Tech’s Uncertain GDPR Future, written by Rhys Dipshan, free subscription required), the author notes that after a three-year battle, a regional court in Berlin has found that Facebook’s default privacy settings, terms of service, and requirement that users register under their own name violate Germany’s data privacy and consent rules.

The January 2018 ruling (available here, in German, of course) based on German law on a case brought by The Federation of German Consumer Organisations (VZBV) could nonetheless illustrate trouble for international technology companies under the GDPR, once it takes effect on May 25th of this year.

Germany’s data privacy laws are currently based on the EU Directive 95/46/EC, the data privacy directive passed by the European Union in 1995 which has provisions that mirror those in the GDPR, especially around the issue of consent.  EU Directive 95/46/EC will be replaced by GDPR on May 25th.

Last November, the EU Article 29 Data Protection Working Party (WP29) issued Guidelines on Consent under Regulation 2016/679 to clarify how the EU would move to define and regulate consent and that guidance aligns closely with how the German court interpreted consent in the case against Facebook. For example, the court ruled that the pre-activated privacy settings on Facebook’s mobile application, such as allowing geotagging and for search engines to index a user’s Facebook profile, are a violation of user consent.

The court also found that eight clauses in Facebook’s terms of service assumed and framed consent too broadly and declared that asking users to register under their own names “was a covert way of getting people’s consent to use their real names,” said Nick Wallace, a senior policy analyst at the Center for Data Innovation.

The WP29’s guidance affirms both points and it also notes, “If consent is bundled up as a non-negotiable part of terms and conditions, it is presumed not to have been freely given.”  WP29 also states, “The use of pre-ticked opt-in boxes is invalid under the GDPR. Silence or inactivity on the part of the data subject, as well as merely proceeding with a service cannot be regarded as an active indication of choice.”

Debbie Reynolds, director of EimerStahl Discovery Solutions, an affiliate of law firm Eimer Stahl, stated that “Facebook and a lot of tech companies sell marketing,” and having their users register under their real names “makes the information they collect more valuable. So I think this is going to in some way change the foundation of how they are operating today.”

As you can imagine, the requirements of specific consent could change things for a lot of companies that currently collect data from individuals, including EU data subjects – perhaps significantly.  We will see.

Speaking of data privacy, today is the day that the Supreme Court will hear oral argument in United States v. Microsoft Corp (which we’ve referred to as the “Microsoft Ireland” case).  Needless to say, the ruling in this case will have major impact on how organizations treat data privacy as well.  We will certainly cover the ruling when it’s issued.

So, what do you think?  Is your organization changing how it obtains consent from individuals for handling their data?  Please share any comments you might have or if you’d like to know more about a particular topic.

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