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

34 Pages Posted: 10 Nov 2020 Last revised: 25 May 2022

See all articles by Wolfgang Kerber

Wolfgang Kerber

University of Marburg - School of Business & Economics

Karsten K. Zolna

University of Marburg - School of Business & Economics

Date Written: November 14, 2021

Abstract

Can competition law consider effects on privacy, or should privacy concerns of data-collecting behaviour only be dealt with by data protection law? In this paper, we analyse the German Facebook case, in which the requirement of giving consent to the combination of personal data from different sources was prohibited as exploitative abuse by a dominant firm. We show, from an economic perspective, that due to the simultaneous existence of two market failures (market dominance, information and behavioural problems) and complex interaction effects between both market failures and both policies in digital markets, a new, much more complex relationship emerges. Since the traditional approach of a strict separation of both policies is no longer feasible, a more integrative and collaborative policy approach for competition law and data protection law might be necessary. With respect to the substantive issue in the Facebook case, i.e. protecting a minimum standard of choice for consumers regarding their personal data vis-a-vis dominant digital platform firms, the recent decision by the German Federal Court of Justice in this case and the proposed Digital Markets Act have led to new perspectives for dealing with privacy concerns in competition law and new forms of ex-ante regulation.

Keywords: competition law, Facebook, digital platforms, privacy, data protection law

JEL Classification: K21, K24, L40, L50

Suggested Citation

Kerber, Wolfgang and Zolna, Karsten K., The German Facebook Case: The Law and Economics of the Relationship between Competition and Data Protection Law (November 14, 2021). Available at SSRN: https://ssrn.com/abstract=3719098 or http://dx.doi.org/10.2139/ssrn.3719098

Wolfgang Kerber (Contact Author)

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany
+49 6421 2823921 (Phone)

Karsten K. Zolna

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany

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