a) In the case of an abuse of conditions under Section 19 (1) ARC, the exploitation of a dominant position does not always require a causal connection between the market dominance and the disapproved conduct (conduct causality). A causal connection between the market dominance and the market result (result causality) may be sufficient if, due to the special market conditions, the conduct of the dominant company leads to market results which would not be expected in the case of functioning competition and, moreover, the conduct complained of not only constitutes exploitation but is at the same time also likely to hinder competition.
b) In the case of two-sided platform markets, such a causal relationship between market dominance and market outcome may exist in particular if the exploitation on one side of the market by the intermediary is at the same time capable of impairing competition on the dominated market as well as on the other side of the market.
BGH, decision of June 23, 2020 - KVR 69/19 - OLG Düsseldorf
On June 23, 2020, the Cartel Senate of the Federal Court of Justice (Bundesgerichtshof) by the presiding judge Prof. Dr. Meier-Beck, the judges Prof. Dr. Kirchhoff and Dr. Tolkmitt, and the judges Dr. Rombach and Dr. Linder
On appeal, the order of the 1st Cartel Senate of the Düsseldorf Higher Regional Court of August 26, 2019 is set aside.
The application to order the suspensive effect of the appeal against the order of the Federal Cartel Office of February 6, 2019 is dismissed.
The parties concerned shall bear the costs of the appeal proceedings, including the expenses of the Federal Cartel Office necessary for the appropriate handling of the matter.
The value of the subject matter of the appeal proceedings is set at €30 million.
I. The party concerned to1 is the parent company of the Facebook Group, the party concerned to2 , which is domiciled in Ireland, operates the Internet-based communications network Facebook in Europe, and the party concerned to3 is the German subsidiary (all together hereinafter: Facebook). Other subsidiaries of the Facebook group offer further internet services such as, in particular, Instagram, WhatsApp, Masquerade and Oculus.
The Facebook network offers private users the use of a platform with a range of functions through which they can communicate with third parties, in particular persons close to them (friends), make texts, images and films accessible to them (share) and establish or join interest groups. This requires registration, with which the user creates a personal Facebook account and a user profile in which he provides information about himself and other personal circumstances. Furthermore, he can specify his interests and post a profile photo. On this basis, Facebook provides the user with personal Facebook pages. On the respective start page, current news (posts) from friends or third parties to whose messages the user has subscribed are displayed in a standardized format (news feed). The user can disseminate his or her own posts via "status messages."
The social network is financed by online advertising. Facebook's advertising partners are provided with an ad manager, which can determine the appropriate target group in more detail and place the ads on Facebook pages. Via an interface (Facebook Pixel), a company can transmit its own customer list to Facebook in encrypted form. With various other programming interfaces provided (Facebook Business Tools), Facebook enables companies to connect their own websites or applications for mobile devices (apps) to Facebook pages in a variety of ways. For example, Facebook users can use plug-ins to express their interest in company pages or certain content ("Like" or "Share" buttons) or post comments; the corresponding posts then appear in the News Feed of their Facebook friends. Via a Facebook login, a Facebook user can log in to third-party websites under all common operating systems using his or her registered user data. The success of a company's advertising can be measured and analyzed via measurement and analysis functions and programs offered by Facebook. In this context, not only data on the behavior of users on Facebook pages is collected, but also, for example via Facebook Pixel, data on the call-up of third-party pages by Facebook users. The analytical and statistical functions of Facebook Analytics provide companies with aggregated data on how users interact with the services they offer across different devices, platforms and websites.
Facebook has filed an appeal against the decision of the Federal Cartel Office. At Facebook's request, the Court of Appeal issued a decision pursuant to Section 65 (3) sentence 3 in conjunction with Section 65 (3) sentence 1 no. 2 GWB. Sentence 1 No. 2 GWB, the court of appeal ordered the suspensive effect of the appeal (OLG Düsseldorf, WRP 2019, 1333). The Federal Cartel Office challenges this with its appeal on points of law admitted by the court of appeal.
II. The Court of Appeal essentially gave the following reasons for its decision:
III This does not stand up to scrutiny in the appeal proceedings. The Court of Appeal erred in law in affirming the prerequisites for ordering the suspensive effect of the appeal due to serious doubts about the lawfulness of the contested order.
1 "Serious doubts" within the meaning of Section 65 (3) sentence 3 in conjunction with sentence 1 no. 2 ARC are present. Sentence 1 No. 2 GWB exist if there are substantial reasons to believe that the contested order is unlikely to stand up to legal scrutiny (see BVerfG, Judgment of May 14, 1996 - 2 BvR 1516/93, BVerfGE 94, 166, 194 = NVwZ 1996, 678, 680; BVerwG, Judgment of February 20, 2020 - 1 C 19.19, juris para. 35). The contested order is thus not subject to a comprehensive review of legality in the summary proceedings pursuant to Section 65 (3) GWB (BGH, decision of January 26, 2016 - KVZ 41/15, WuW 2016, 249 marginal no. 19 - Energieversorgung Titisee-Neustadt). "Serious doubts" do not require the full judicial conviction of the unlawfulness of the contested order (see BVerwG, judgment of February 20, 2020 - 1 C 19.19, juris marginal no. 35).
2 Due to the limited standard of review, decisions of the appeal court pursuant to Section 65 (3) ARC are regularly subject to only limited review in appeal proceedings. According to the established case law of the Senate, the Court of Appeal only examines the result reached by the Court of Appeal for legal plausibility. The appeal decision is therefore generally upheld in appeal proceedings to the extent that it proves to be justifiable (BGH, Order of May 8, 2007 - KVR 31/06, WuW/E 2007, 907 marginal no. 17 - Lotto im Internet; Order of September 25, 2007 - KVR 19/07, WuW 2008, 57 marginal no. 10 - Sulzer/Kelmix; Order of October 18, 2011 - KVR 9/11, WRP 2012, 557 marginal no. 8 - Niederbarnimer Wasserverband).
A lowered standard of review is also not opposed by the purpose pursued by the legislator with the extension of the possibility of appeal to decisions of the Higher Regional Courts pursuant to Section 65 GWB introduced by the 7th GWB amendment (aA Nothdurft in Münchener Kommentar zum Wettbewerbsrecht, 3rd ed. 2020, Section 76 GWB marginal no. 34; doubting Kühnen in Loewenheim/Meessen/Riesenkampff/Kersting/Meyer-Lindemann, 4th ed. 2020, Section 65 marginal no. 15). The reason given for the proposed amendment was that it would enable legal issues of fundamental importance to be decided by the Federal Court of Justice, even if there was no longer any appealable decision in the main action. For the parties to the proceedings, urgent legal protection is often of greater importance than the main proceedings. This is taken into account with the opening of an appeal instance (Federal Government's draft bill for the 7th GWB amendment, BT-Drucks. 15/3640, p. 81; for the legislative history, see BGH, Order of November 11, 2008 - KVR 18/08, WuW 2009, 521 para. 17 - Werhahn/Norddeutsche Mischwerke). A fundamentally limited control density does not contradict this. It does not necessarily mean that legal questions of fundamental importance cannot be clarified. If legal questions of relevance to the decision arise in the context of the review of representability, they can be answered by the court of appeal if and to the extent that a sufficiently intensive examination of the factual and legal situation has taken place. For this reason, the Senate has already clarified legal questions of a fundamental nature in the context of a review of decisions under Section 65 (3) ARC (see BGH, decision of September 25, 2007 - KVR 19/07, WuW 2008, 57 marginal no. 15 - Sulzer/Kelmix).
3 There are no serious doubts that Facebook is the norm addressee of Section 19 (1) ARC. The assumption of the Federal Cartel Office that Facebook has a dominant position on the relevant national market for social networks for private users cannot be objected to on the basis of the limited standard of review applicable here.
a) Pursuant to Section 18 (1) ARC, an undertaking is market-dominant if, as a provider or buyer of a certain type of goods or commercial services, it is without competitors on the relevant product and geographic market, is not exposed to any significant competition or has a superior market position in relation to its competitors.
b) The Court of Appeal did not make any findings as to whether the Federal Cartel Office correctly defined the relevant product and geographic market and whether Facebook has a dominant position on this market. This does not prevent the Senate from assessing Facebook's ability to be an addressee of the standard in the present proceedings on the basis of the limited standard of review described above (para. 11).
aa) The delimitation of the relevant market is primarily incumbent on the judge of the facts, as it essentially depends on the actual circumstances of the market - to be determined by the judge of the facts (BGH, decision of January 16, 2007 - KVR 12/06, BGHZ 170, 299 para. 15 - National Geographic II; decision of December 11, 2018 - KVR 65/17, WuW 2019, 262 para. 21 - EDEKA/Kaiser ́s Tengelmann mwN). However, if - as is regularly the case - the decision on an application to order the suspensive effect of the appeal is made at a point in time at which the appeal court has not carried out any further investigation of the facts, the appeal court and accordingly also the court of appeal on a point of law must take as a basis the factual findings of the contested order, insofar as there are no serious doubts that these can also be used as a basis for the final decision in the appeal proceedings and no further factual findings or findings deviating from the findings of the Federal Cartel Office are to be expected in favor of the company concerned.
bb) In the case in dispute, the findings made by the Federal Cartel Office are based on a sufficient examination of the circumstances, whereby the members of the Bundeskartellamt's Decision Division belong to the relevant group of customers and were therefore also able to make the necessary findings themselves on the basis of their own life experience (BGHZ170, 299 marginal no.15 - National Geographic II).
cc) Admittedly, according to the case law of the Senate, the appeal court has the option in appeal proceedings to have the antitrust authority conduct additional factual investigations (BGH, decision of November 11, 2008 - KVR 60/07, BGHZ 178, 285 marginal no. 32 - E.ON/Stadtwerke Eschwege). However, further factual clarification by the Court of Appeal is not required. As a rule, there is only cause for additional investigations if the submissions of the parties or the facts of the case as such give cause for this upon careful consideration of the possibilities that present themselves (BGH, Order of November 11, 2008 - KVR 60/07, BGHZ 178, 285 para. 32 - E.ON/Stadtwerke Eschwege). According to the current state of facts and dispute, there is no indication of this.
c) Contrary to Facebook's view, it is not objectionable that the Federal Cartel Office in the case in dispute did not assume a market for the attention of users to be delimited worldwide, but instead focused on the market for social networks to be delimited nationally.
aa) In factual terms, the demand market for social networks is decisive.
(1) The view that it is primarily relevant for market definition that Facebook competes with other providers of online services for the limited time and attention of users worldwide is already incorrect at the outset. This is because the market definition depends on the view of the market opponent, not on the view of the company concerned or its competitors. Competitive effects outside the market thus defined to which the companies are exposed and which restrict their scope of behavior on the market concerned, such as the effect of substitute competition, are only to be taken into account in the question of market dominance (BGHZ 170, 299 marginal no. 18 - National Geographic II). It is therefore not relevant for market definition that service providers have described themselves as competitors of Facebook through public statements. This can at most be an indication that they belong to the relevant market.
(2) If, as in the case in dispute, the issue is a potentially dominant position of a provider, the product or service offered must first be identified. Based on this, it must then be examined whether products or services offered by other providers are interchangeable from the point of view of the demanders in terms of their characteristics, intended use and price situation in order to meet a specific need (needs market concept; see only BGH, judgment of January 24, 2017 - KZR 2/15, WRP 2017, 707 marginal no. 20 - Kabelkanalanlagen; judgment of October 8, 2019 - KZR 73/17, WuW 2019, 638 marginal no. 23 - Werbeblocker III).
(3) With the service offering of the social network, Facebook enables private users to find friends and acquaintances and to share experiences, opinions and content with them in certain identified circles of persons in various forms. The typical contractual service of social networks is to enable the user to have a comprehensive, personal "virtual space" (European Commission, Decision of October 3, 2014 - COMP/M.7217 para. 54 - Facebook/WhatsApp). The user should be able to establish "real interpersonal relationships" in the network. In this context, the user's own "virtual identity", which the user creates by creating his or her personal profile and by creating a friends list, is to be at the center of the user experience. This user identity is intended to be a virtual reflection of his or her real life. All activities that a user unfolds in a social network are related to his personal network of friends and acquaintances and thus enable him to have a ʺpersonalized user experienceʺ and communication.
(4) According to the Bundeskartellamt's findings, which are free of legal errors, from the perspective of (potential) users this service is not interchangeable in functional terms (see BGHZ 170, 299 para. 18 - National Geographic II) with the range of services offered by professional networks and job boards (Xing, LinkedIn, Indeed, Stepstone), messaging services such as Snapchat, WhatsApp and Skype and other social media such as YouTube, Twitter and Pinterest. This is because their object or, in any case, focus is either professional communication or contact maintenance (as with Xing and LinkedIn), bilateral communication or group communication within small groups (as with messaging services such as WhatsApp and Snapchat), the dissemination of images or films (as with Instagram or YouTube) or the public expression of opinions (as with Twitter, for example).
(5) The Federal Cartel Office did not fail to recognize that any flexibility in switching offers must already be taken into account in the context of market definition if the providers of similar products and services are willing and able to switch their range of services at short notice and with economically justifiable effort (BGHZ 170, 299 margin no. 20 - National Geographic II). It negated these requirements in an unobjectionable manner.
(6) The fact that Facebook does not demand any monetary consideration for the use of the service by the users does not prevent the assumption of such a delimited market, nor does it prevent the applicability of the demand market concept. Pursuant to Section 18 (2a) ARC, the fact that a service is provided free of charge does not prevent the assumption of a market.
(a) However, the determination of a gratuitous exchange relationship does not always justify the assumption that a market relevant under competition law exists. This applies in particular outside of multilateral markets. If gratuitous services are offered for non-economic motives without being part of a strategy designed at least indirectly or in the longer term for profit-making purposes, the corresponding competitive relevance is lacking (Federal Government Bill, Draft of a 9th Act amending the Act against Restraints of Competition, BT- Drucks. 18/10207, S. 48). This is a multi-sided market in which the gratuitous service is part of a business activity designed for profit-making purposes. Facebook does provide the social network to private users free of charge; at the same time, Facebook, as an intermediary, enables third companies to reach the users of the platform with their advertising and thus also finances the user platform.
(b) There is also no need to correct the demand market concept with regard to the fact that users do not provide any monetary consideration. In this context, the question of whether the user's consideration is to be seen in the fact that he enables the collection and utilization of his personal data is irrelevant. This is because even in the case of no consideration from the user, the user's viewpoint as a demander would be decisive, because the person who decides on the selection of the service provider brings together supply and demand. This is the reason why the Senate, for example, in the area of application of the principle of benefits in kind of the statutory health insurance, has considered the view of the recipient of the service to be decisive, although the recipient does not have to pay for the service itself (BGH, decision of January 16, 2008 - KVR 26/07, BGHZ 175, 333 marginal no. 29 - Kreiskrankenhaus Bad-Neustadt mwN).
(7) The Federal Cartel Office correctly assumed that the two sides of this multi-sided market do not form a single opposing market side.
(a) In view of the purpose of determining the relevant market, i.e. to identify the competitive forces which the undertakings concerned have to face, and the objective of Section 19 ARC, i.e. to prevent the abusive exploitation of room for maneuver which is not sufficiently controlled by competition to the detriment of third parties (cf. only BGH, judgment of November 4, 2003 - KZR 16/02, BGHZ 156, 379, 384 - Strom und Telefon I; WuW 2019, 638 marginal no. 26 - Werbeblocker III), a uniform market definition is only justified on a multi-sided market if a uniform need of the market sides can be established. For only in this case do the competitive effects emanating from the respective demand groups not differ.
(b) It is obvious that Facebook serves a different need among the user group of advertisers than among the user group of private users. On the latter side, the need is met to reach the attention of the users of the network with (personalized) advertising and thus to promote the sale of its own products or services.
bb) The Bundeskartellamt's geographic market definition is also not objectionable.
(1) The geographic market definition is determined by the actual possibilities of evasion that exist for the market counterparty, in this case the (potential) users of the social network. In this context, the actual market conditions shall be decisive (BGH, decision of December 13, 2005 - KVR 13/05, WuW 2006, 780 marginal no. 16 - Stadtwerke Dachau). These can result from economic, technical or other actual circumstances, whereby the actual consumer habits are to be taken into account (cf. for submarkets: BGHZ 156, 379, 383 f. - Strom und Telefon I).
(2) Due to the language barriers and the content shared by users with a regional or national reference as well as the advertising, which is written in German and tailored to the interests of German users, the definition of a national relevant market by the Federal Cartel Office cannot be objected to. In this context, it is of no decisive importance that social networks are often available worldwide and, like facebook.com, are also designed for worldwide use. This is because the language settings differ according to the respective user region. Since, according to the results of the user survey commissioned by the Federal Cartel Office, more than three quarters of all users have their friends and acquaintances relevant to the network within national borders, there is in principle no reason for them to use services which do not provide German language settings. The Bundeskartellamt's unchallenged finding that the user behavior of domestic users differs from that of others also speaks in favor of a national market definition.
d) Based on the Bundeskartellamt's findings in the contested decision, Facebook has a dominant position on the relevant Germany-wide market for social networks.
aa) A dominant position within the meaning of Section 18 (1) ARC (para. 15) generally results from the concurrence of several factors, each of which need not be decisive in itself (see ECJ, Judgment of February 14, 1978 - C-27/76, NJW 1978, 2439, 2440 - United Brands v. Commission; BGH, Judgment of May 5, 2020 - KZR 36/17, juris para. 57 - FRAND objection). Rather, the assessment of a company's market position must be based on an overall consideration of all given circumstances (cf. Federal Government's draft bill of a 9th Act Amending the Act Against Restraints of Competition, BT-Drucks. 18/10207, S. 49). The Federal Cartel Office was right to affirm the existence of a dominant position on the basis of an overall assessment of all material circumstances.
bb) In determining Facebook's market share, the Bundeskartellamt focused primarily on Facebook's share of daily active users of social networks. According to the results of the traffic survey conducted by the Bundeskartellamt, the share of users of the Facebook network was between 90% and 95% in 2012, between 92% and 97% in 2013, over 95% in the years 2014 to 2016, over 96% in 2017 and over 97% in 2018.
(1) This high market share is of particular importance when viewed as a whole, not only because of its absolute size, but also because the gap between it and its competitors is considerable (see BGHZ 170, 299 marginal no. 21 - National Geographic II; BGH, judgment of March 4, 2008 - KVR 21/07, BGHZ 176, 1 marginal no. 27 - Soda-Club II, with the remainder).
(2) Facebook unsuccessfully objects to the Bundeskartellamt's market share calculation, arguing that the user survey showed that more than 42.1% of social media users and more than 70% of monthly active users did not use Facebook. This is because the user survey in this respect did not relate to the demand market of social networks relevant here, but to social media and thus also included the services YouTube, WhatsApp, Xing, Twitter, Instagram, Message, LinkedIn, Pinterest and Snapchat, among others.
cc) Contrary to Facebook's complaint, no comprehensive competitive analysis of the advertising market as another market side was required for the overall consideration.
(1) It can be assumed in favor of Facebook that there is functioning competition on the other side of the market. It is therefore harmless that the Federal Cartel Office omitted to define the market on this side of the market. This is because Facebook's market position on the relevant market is not relativized in any decisive way by the fact that Facebook will generally take into account the effects of its conduct on one side of the market on the other side of the market in its strategic decisions. However, there are interactions between the two sides of the market, which can be seen, for example, in the fact that an increase in reach among users of the network provided free of charge has a positive effect on Facebook's position vis-à-vis advertisers (indirect network effects). Conversely, an exodus of users due to adverse strategic decisions on the user side can have a direct negative impact on the advertising side. For this reason, in the case of multi-sided markets and networks pursuant to Section 18 (3a) no. 1 ARC, such indirect network effects must be taken into account when assessing the market position of a company.
(2) Contrary to Facebook's view, however, the indirect network effects do not rule out uncontrolled scope for behavior on the user side, but on the contrary motivate Facebook to exploit existing scope for behavior on the user side in favor of the advertising market side. These are in fact asymmetric network effects, because the interactions do not exist to the same extent on both sides (cf. the German government's draft bill for a 9th Act amending the Act against Restraints of Competition, BT-Drucks. 18/10208, S. 50). This applies at any rate with regard to access to data relevant to competition in the advertising market, which pursuant to Section 18 (3a) No. 4 ARC is a key market structure parameter in the determination of a dominant position, especially in the multi-sided market under assessment here. The attractiveness of Facebook's range of services made available to advertising customers increases with the quality and quantity of the data made available. This results in an incentive for Facebook to exploit behavioral margins in the user market in order to increase the volume of data usage. This is not countered by significant countervailing competitive forces in the social networking market.
However, according to the user survey commissioned by the German Federal Cartel Office, 46% of Facebook users would see "less data disclosed" as a reason to make greater use of another service instead of Facebook. However, due to existing direct network effects, this has no impact on Facebook's market position. Direct network effects refer to the relationship between the benefit and the number of users of a product or service (Federal Government's draft bill for a 9th Act amending the Act against Restraints of Competition, BT-Drucks. 18/10207, S. 49). The Court of Appeal was right to affirm such direct network effects. This is because the benefit of the Facebook network increases for users with the total number of people connected to the network, because the greater the number of users, the greater the communication possibilities for each individual user. The fact that this is not just about the people available, but about the identity of the users who can be reached, i.e., that "identity-based" network effects exist, is confirmed by the results of the user survey. According to this, it is important to 85.8 % of the respondents that friends are users. 47.2% see the total number of users as important (question 10). These direct network effects lead to a high binding effect (lock-in effect) and ultimately to the fact that users are more willing to accept disadvantages associated with the use of the social network - in particular also those that are advantageous for the advertising market. This retention effect is strongly pronounced due to the size of the Facebook social network.
dd) In particular in the case of the multi-sided market at issue here, the parallel use of several services ("multi-homing", Federal Government's draft bill for a 9th Act amending the Act against Restraints of Competition, BT-Drucks. 18/10207, p. 50) and the switching costs for users must be taken into account when assessing the company's market position. The Federal Cartel Office did not fail to recognize this. However, it correctly assumed that these factors do not have a significant impact on Facebook's market position.
(1) According to the Bundeskartellamt's findings, there is no evidence of any significant parallel use of social networks belonging to the market which could prevent competitors from leaving or facilitate new entries. This is supported by the finding that the development in the years 2012 to 2018 shows that Facebook's user shares are increasing, while the user shares of StayFriends and Jappy are consistently falling. The operator of the StudiVZ network has since gone bankrupt, so no current user figures are available. In this respect, the Federal Cartel Office assumed without legal error that the user figures are stagnating at the level already reached in 2016. The user shares of Jappy and Wize.Life are at a very low level. Insofar as increases in user shares can be determined, these are marginal. Google+ was temporarily able to achieve an increasing user share, albeit at a low level. The user share increased slightly in the period from the 1st quarter of 2014 to the 1st quarter of 2015. In the subsequent quarters, however, the user share fell continuously to between 1% and 2% most recently.
(2) In contrast, Facebook argues without success that multi-homing is the rule on the markets on which the applicants operate. This already does not show with the required substance that this submission relates to the relevant market here. Furthermore, this has not been made credible. The Bitkom presentation "Social Media Trends 2018" of February 27, 2018 (Exhibit Ast 35) submitted by Facebook in the complaint proceedings does not reveal any multi-homing on the relevant market. It is true that the presentation states that the average Internet user is logged into three social networks. However, the understanding of the presentation differs from the understanding of the social network used here, as the presentation considers not only Facebook, but also YouTube, Instagram, Pinterest, Twitter, Snapchat, Xing, LinkedIn, Tumblr and Reddit.
(3) One argument in favor of multi-homing is that the parallel use of social networks is not associated with any additional costs for the user. Parallel use nevertheless encounters various obstacles. The Federal Cartel Office rightly assumed that a high hurdle for parallel use of social networks arises from the identity-based direct network effects (marg. no. 44), which cannot exist across networks due to the (technical) incompatibility of social networks in the market. According to the intended use of social networks, parallel use only makes sense for users if they can find their friends and acquaintances again as users in an alternative network. Consequently, the user must persuade his existing contacts in the original network to switch or use the network in parallel. However, since his contacts have other contacts in the previous network, they must also be persuaded to switch or use the network in parallel. The more contacts a user has with the previous network and the more closely these contacts are connected to other users, the more difficult or impossible it is to transfer the contacts to a new network. The lack of data portability also speaks against multi-homing. The same hurdles also exist for a change of social network.
ee) It is not objectionable that the Federal Cartel Office assumed in the context of the overall assessment that Facebook's market position would not be significantly restricted by substitute competition from social media such as YouTube, Twitter and Snapchat. The competitive pressure to which the social media outside the market relevant here are exposed by the Facebook social network is greater than that to which Facebook is exposed by this substitution competition. The Bundeskartellamt rightly points out that Twitter and Snapchat in particular can be substituted by the corresponding functionalities of facebook.com, Twitter and Snapchat, on the other hand, can only substitute the functionalities of facebook.com to a limited extent and cannot offer the full ʺpersonalized user experienceʺ. Because of the gratuitousness of the Facebook service and the direct network effects, there will also be little inclination among users to forego Facebook's more comprehensive service. There is also no reason for this, because it is possible to use the other services mentioned in parallel. That there is parallel use of Facebook and at least one other service is clear from the Bitkom presentation submitted by Facebook (Annex Ast 35). According to this, for example, 79% of 14 to 29 year olds stated that they had used YouTube in the past three months. Facebook's share in the same period among the same user group was 78%.
ff) When assessing the market position of a company in a multi-sided market, particular importance is attached to innovation-driven competitive pressure (Section 18 (3a) no. 5 ARC). Contrary to Facebook's complaint, the Federal Cartel Office took sufficient account of this in the contested decision. The fact that Facebook must react to innovations of competitors does not speak against a dominant position of Facebook.
(1) Market positions of networks on the Internet can theoretically be attacked more readily by competitors due to the prevailing dynamic developments as a result of sometimes simple technological innovations or changing user perceptions at short notice. The competitive pressure resulting from the innovative power of Internet-based offerings includes the possibility of disruptive changes that can lead to the vulnerability of even a company's strong market position. In each individual case, however, it is necessary to carefully examine whether there is more than just an abstract vulnerability of the market position that is too vague in both factual and temporal terms. If the mere prospect that a dominant position could disappear at some point were to lead to a denial of market dominance, the abuse control would be obsolete (cf. draft bill of the BReg, BT-Drucks. 18/10207, p. 51). This would not be compatible with the purpose of abuse control, which is aimed at limiting economic power in markets in which competition does not (or no longer) effectively exercise its control function (Resolution Recommendation of the Committee on Economic Affairs on the Draft 4th Amendment to the ARC, BT-Druckblatt, p. 51). GWB amendment, BT-Drucks. 8/3690, p. 24; BGH, judgment of November 15, 1994 - KVR 29/93, BGHZ 128, 17, 27, 29 - Gasdurchleitung; BGHZ 156, 379, 384 - Strom und Telefon I; WuW 2019, 638 marginal no. 26 - Werbeblocker III).
(2) According to the findings of the Bundeskartellamt in the contested decision, Facebook has so far been able to successfully ward off the impetus emanating from companies from neighboring markets through innovations and expansions of its own social media. In the opinion of the Office, Facebook's own innovations presented in detail as well as the examples of influential innovations in the competitive environment did not show any competitive pressure that could attack Facebook's market position so far. These statements find sufficient support in the fact that, despite the innovative power of the Internet over the past seven years, no replacement tendencies or relevant losses of market share by Facebook can be identified. Thus, there is only a vague, abstract vulnerability of the market position, which does not relativize Facebook's dominant position to any decisive extent, at least at present and at the time of the adoption of the Office's decision.
b) The Court of Appeal correctly assumed that the use of unlawful general terms and conditions by market-dominant companies can constitute an abuse under the general clause of Section 19 (1) GWB (BGH, judgments of November 6, 2013 - KZR 58/11, BGHZ 199, 1 marginal no. 65 - VBL-Gegenwert I, and of January 24, 2017 - KZR 47/14, WuW 2017, 283 marginal no. 35 - VBL-Gegenwert II).
c) However, it denied the abuse of a dominant position pursuant to Section 19 (1) GWB on unsupportable grounds.
aa) The Court of Appeal assumed that the conditions objected to did not mean a loss of control on the part of the user and did not create a situation of coercion for the user. They merely made it necessary to weigh up the advantages resulting from the use of an advertising-financed (and thus free) social network against the consequences associated with the use of the additional data by Facebook. The user could make this assessment uninfluenced and completely autonomously according to his or her personal preferences and values. The fact that it can vary - as shown by the considerable number of Facebook users (around 32 million per month) and Facebook non-users (around 50 million) - does not even begin to prove that the user is being exploited.
bb) Abuse cannot be denied on this basis. This is because it does not take into account the interest of those users who do not want to do without the use of the social network, but who also attach importance to the collection and processing of data being limited to what is necessary for the use and financing of the social network. By extending the typical range of services (para. 24) of a social platform to include the "provision of a personalized experience" based also on data generated as a result of the user's activity outside the network, a service content is imposed on them that they may not want and for which they in any case do not want to accept Facebook's access to personal data that they have not provided to Facebook. It can be left open whether this involves the coupling of two independent products, namely the provision of functionalities based on the use of the network on the one hand and services based on data outside the network on the other, or - which is closer here - a mere extension of services. The relevance of this service extension under antitrust law results from the fact that the private customers of the platform provider's service receive a service which is indispensable for them only together with another undesirable service (cf. BGH, decision of November 9, 1982 - KVR 9/81, WuW/E BGH 1965, 1966 - Gemeinsamer Anzeigenteil). They are not left with a choice as to whether they want to use the network with a more intensive ʺpersonalization of the user experienceʺ, which is associated with potentially unrestricted access to characteristics also of their "off-Facebook" Internet use by Facebook, or whether they only want to agree to a personalization based on the data they disclose on facebook.com itself.
cc) Contrary to the opinion of the Court of Appeal, the relevance of such an imposed service extension for the examination of an abuse of market power does not cease to exist because the use of the network and thus the provision of a "personalized experience" using "off-Facebook data" is free of charge for the user. On the contrary, antitrust concerns arise - subject to an overall assessment of the circumstances of the individual case (para. 98 below) - from the fact that by imposing an unwanted service, the consideration for the desired service (namely the use of the social network) is increased in the form of the provision of personal user data, which represents a significant competitive parameter for the further market side.
(1) That data has a significant economic value is generally recognized (Berberich/Kantschik, NZI 2017, 1; Schweitzer/Haucap/Kerber/Welker, Modernisierung der Missbrauchsaufsicht für marktmächtige Unternehmen, 2018, p. 13; Eichberger, VersR 2019, 709, 711; Paulus, ZIP 2019, 2133; Kornmeier/Baranowski, BB 2019, 1219) and is vividly illustrated by the market capitalization of companies such as Facebook and Google.
(2) The fact that data is incorporeal and characterized by non-rivalry, non-exclusivity and non-usability (Schmid/Schmidt/Zech, sic! 2018, 627, 628; Kornmeier/Barnowski, BB 2019, 1219) admittedly means that data use by Facebook does not weaken the consumer in economic terms. Contrary to the opinion of the court of appeal, however, this aspect does not exhaust the assessment under antitrust law. For this does not change the fact that the users provide Facebook with an economically valuable service by enabling Facebook to collect and commercially exploit user-related data (see BGH, judgment of April 12, 2016 - KZR 30/14, WuW 2016, 427 para. 41 - Net Cologne I), whereby it is irrelevant in this context whether the data can be attributed to the users under property law (see Eichberger, VersR 2019, 709, 710, 713).
(3) According to the economic consideration necessary for the antitrust assessment, the user provides a consideration for the use of the network, which is increased by the extension of the "personalized experience" with the help of "off-Facebook" data. It is true that users use the Facebook network without monetary consideration and to that extent free of charge, while the advertising companies pay a price to Facebook as the network operator for the placement of the advertising, including the analysis of the data. This revenue is also used to finance the operation of the network. However, since the advertising is preferably tailored to the users and the particular attractiveness of advertising in and via the social network for the companies interested in advertising their products and services results from this, it is the users who enable this "cross-subsidization" through their personal data, which Facebook can monetize on the other market side of the two-sided market (cf. Mohr, EuZW 2019, 265, 268). The quality and quantity of user-related data are a decisive factor for measuring the price to be paid by advertising partners, which, in view of the interdependencies described above (cf. also the German government's draft bill, BT- Drucks. 18/10207, p. 48) also affects the relationship of the users to Facebook as the operator of the network. In this context, the fact that the usability of the data and its value can be increased by combining it and linking it to patterns is of particular importance. The value and the possibilities of knowledge from each individual data element increase with the increase in the amount of other data available. The Court of Appeal's consideration that the user is not prevented from making his data available to any number of companies as often as he wishes therefore misses the economic essence of the user's disclosure of data: the user contributes to a database created by Facebook and therefore only available to Facebook and the customers of its services on the second market side, which he himself does not have at his disposal - even to the extent that only the data resulting from his own Internet use is affected - and which he therefore cannot make equally accessible to third parties.
dd) However, just as little as the use of contractual conditions that are inadmissible according to the values of the legal system by a market-dominant company, the expansion of the scope of services imposed by contractual conditions does not in itself indicate a threat to the protected interests of the Act against Restraints of Competition. Rather, as in the case of forced tying of products or services, anti-competitive effects can arise both in the vertical relationship and in the horizontal relationship if the imposed expansion of services proves to be an exploitation of customers or an impediment to competition (see BGH, judgment of March 30, 2004 - KZR 1/03, BGHZ 158, 334, 340/341 - Der Oberhammer). The harmfulness to competition of the imposed extension of services results here both from the exploitation of the customers and from its anti-competitive effect.
Contrary to the opinion of the Court of Appeal, an abuse does not always require that only its dominant position allows the market dominator to impose those conditions from which an exploitation of the customers results. At any rate, in cases where the imposed service extension leads to a market result to the detriment of the customers which would not be expected in the case of functioning competition, and at the same time to an impediment of competition, the causality required under Section 19 (1) ARC cannot be denied. This is particularly the case if, in a two-sided market, the exploitation of one side of the market by the intermediary is at the same time likely to impair competition on the other side of the market.
(1) The question of the extent to which an abuse of conditions within the meaning of Section 19 ARC requires causality between market dominance and contractual conditions is the subject of controversial discussion, particularly in connection with the dispute and with regard to legally impermissible data processing conditions.
(a) In part, the applicability of Section 19 (1) ARC is not made dependent on a causality test (Lettl, WuW 2016, 214, 215).
(b) According to one view, which has been endorsed by the Court of Appeal, an abuse of conditions necessarily requires instrumental causality (behavioral causality) between market dominance and exploitation (Franck, ZWeR 2016, 137, 151 et seq.; Körber, NZKart 2016, 348, 355; Wiedemann/ Jäger, K&R2016, 217, 219; Thomas, NZKart2017, 92, 95 et seq. ; Schweitzer/ Haucap/Kerber/Welker, Modernisierung der Missbrauchsaufsicht für marktmächtige Unternehmen, Final Report, August 29, 2018, p. 108; Engert, AcP 218 2018, 304, 373; Grothe, Datenmacht in der kartellrechtlichen Missbrauchskontrolle, 2019, p. 233). Which conditions for behavioral causality must be present is judged differently in this context:
(aa) Predominantly, the as-if competition concept is used. If the conditions correspond to those that - for example, due to information asymmetries and rational apathy of consumers - are enforceable even without market dominance or in the case of effective price competition, they cannot constitute abusive exploitation according to this, because they are not enforced by market dominance (Franck, ZWeR 2016, 137, 152; Nuys, WuW 2016, 512, 519; Thomas, NZKart 2017, 92, 95; id, NZKart 2019, 187, 192 f.; Karbaum, DB 2019, 1072, 1076).
(bb) According to another opinion, on the other hand, it should be sufficient if the market position is a contributory cause for the unseen acceptance of the contract conditions. Private users could in any case expect from a company in a prominent position specializing in the handling of user data that its services would be provided in compliance with data protection law (Bergmann/Modest, NZKart 2019, 531, 534).
(c) Finally, according to a view also underlying the contested order, causality should have a "normative character" and not require instrumental causality between market dominance and exploitation (Mohr, EuZW 2019, 265, 273; Fuchs in Immenga/Mestmäcker, Wettbewerbsrecht, 6th ed., 2020, Section 19 GWB marginal no. 234a). For sufficient causality of results, it should be sufficient that the conduct is in principle possible for any company, but that harmful effects on competition only arise in the case of dominant companies (Special Report of the Monopolies Commission, BT-Drucks. 18/5080 para. 527; Fuchs loc.cit. § 19 GWB para. 215a, para. 234a; Mohr, EuZW 2019, 265, 272 f.).
(2) The latter view is to be agreed with insofar as a strict causality of conduct, as required by the Court of Appeal, is a sufficient but not necessary condition for the applicability of Section 19 (1) ARC. At least in cases such as the present one, in which the conditions used lead to market results to the detriment of the demanders, which would not be expected in the case of functioning competition, and at the same time are objectively suitable for hindering competition, the causality required under Section 19 (1) ARC cannot be denied as a rule.
(a) A causality requirement cannot be dispensed with entirely, as Section 19 (1) ARC requires the abuse of a dominant position. The historical legislator has clarified, in particular for the case of classic tying, in which the conclusion of the contract is made dependent on the opposing party accepting goods and services that do not belong objectively or customarily to the trade, that the "abusive exploitation" requires that the dominant position of an undertaking is causal for the conclusion of the tying contract (Written Report of the Committee for Economic Policy on the Draft Law against Restraints of Competition - Printed Papers 3644, 1158 - of June 28, 1957, to BT-Drucks. 2/3644, p. 26, right-hand column).
(b) The causality required under this provision is to be determined in accordance with the purpose of abuse control. This is directed at limiting economic power in markets in which competition does not (or no longer) effectively exercise its control function (Resolution Recommendation of the Committee on Economic Affairs on the Draft 4th Amendment to the ARC, BT-Drucks. 8/3690, p. 24). The abusive exploitation of scope for action not sufficiently controlled by competition to the detriment of third parties is to be prevented (BGHZ 128, 17, 27, 29 - Gasdurchleitung; BGHZ 156, 379, 384 - Strom und Telefon I; WuW 2019, 638 marginal no. 26 - Werbeblocker III). Consumers are thus protected from indirect damage caused by interventions in the market structure and thus from an impairment of competition (see ECJ, judgment of February 21, 1973 - C-6/72, juris marginal no. 26 - Europemballage & Continental Can v. Commission). This is based on the special responsibility that a dominant company bears for ensuring that effective and undistorted competition is not impaired by its conduct (see ECJ, judgment of December 6, 2012 - C-457/10 P, WuW 2013, 427 marginal no. 98 - AstraZeneca v. Commission; BGH, judgment of May 5, 2020 - KZR 36/17, juris marginal no. 72 - FRAND objection).
In particular, in cases in which the use of certain contractual conditions - permissible or impermissible according to the general standards of the legal system - is suitable to secure or increase the dominant position, the effect of the enforceable conditions justifies, subject to the weighing of interests in the individual case, the fundamental application of antitrust abuse control.
Accordingly, the Senate has assumed that the use of unreasonable terms and conditions that make it difficult to terminate a long-standing contractual relationship with a norm addressee of Section 19 (1) ARC regularly constitutes an abuse of market power (WuW 2017, 283 marginal no. 35 - VBL-Gegenwert II). This is because this is an "outflow of the market power or the great superiority of power" of the user (BGHZ 199, 1 marginal no. 65 - VBL- Gegenwert I, BGH, WuW 2017, 283 marginal no. 35 - VBL-Gegenwert II) in the sense that it is precisely the market power that leads to the conditions not only harming the contractual partner, but also being objectively capable of leading to harmful effects on market activity and competition.
(aa) Lower requirements for causality between market dominance and damage to the contracting parties are justified in this case because it already follows from the objective suitability of the conduct to hinder competition that the conduct constitutes an exploitation of the dominant position from the point of view of hindrance. In any case, this justifies that, in the required overall assessment of the conduct, it is also sufficient for an exploitation of the dominant position to the detriment of the contracting parties that the conditions of use complained of lead to a market result which would not be expected under the conditions of functioning competition.
(bb) According to the case law of the Federal Court of Justice, a causal connection between the market dominance and the disapproved conduct, which must be strictly established, does not necessarily exist for an exploitation of the dominant position through an abuse of the right to obstruct within the meaning of Section 19 (2) no. 1 ARC; rather, a causal connection with the effect on competition is sufficient (Federal Court of Justice, judgment of November 4, 2003 - KZR 38/02, WuW/E DE-R 2004, 1210, 1211 - Strom und Telefon I).
(cc) At any rate, in a constellation in which the conduct of the market-dominating company is shown to be an exploitation of its dominant position to the detriment of competitors because of its obstructive effect, it would not be objectively justifiable to disregard the detrimental effects of the conduct to the detriment of users because of a stricter requirement of causality and proof. In a two-sided market in particular, the reciprocal influence of the two sides of the market must not only be taken into account when determining market dominance (Section 18 (3a) ARC). Rather, because the business model relates to both sides of the market, the effects of the respective conduct may also not be considered in isolation.
(dd) The fact that in the case of abuse of terms and conditions conduct and market effects generally coincide does not speak in favor of different causality requirements in these cases (aA Franck, ZWeR 2016, 137, 151; Satzky, NZKart 2018, 554, 557). The market effects of the conduct complained of are not limited to the relationship with the contracting parties. Rather, the conduct may also affect the market conditions for (potential) competitors.
(c) In a constellation in which the conduct is objectively capable of appreciably impairing market conditions, it is not necessary, even for the assumption of abuse within the meaning of Section 19 (1) ARC, for there to be a high probability of the use of other contractual conditions in the event of effective competition, as is required under Section 19 (2) No. 2 ARC. Rather, a corresponding expectation based on actual indications of how market participants react in an economically reasonable manner to ascertainable user preferences and the resulting incentives for the use of other contractual terms and conditions or service diversification is sufficient.
This is not contradicted by the fact that a stricter standard applies to exploitative abuse under Section 19 (2) no. 2 ARC. This is because this standard example is limited to conduct that constitutes mere exploitation. The concept of as-if competition, as it is based on Section 19 (2) No. 2 ARC, is only of limited or no use with regard to the factual findings required for this purpose if, as a result of the degree of market dominance and the particular market conditions as well as the type of abuse, there is no or virtually no prospect of effective competition and, therefore, concrete findings on the conditions that would most likely occur under competitive conditions are not or hardly possible.
The assumption of an abuse of a restraint pursuant to Section 19 (2) no. 1 ARC also does not necessarily require the establishment of actual effects. Rather, it is sufficient if a competitive action parameter is objectively capable of noticeably impairing market conditions (cf. on exclusionary conduct under Section 19 (4) no. 1 ARC old: BGH, Order of November 6, 2012 - KVR 54/11, WuW 2013, 627 marginal no. 41 - Gasversorgung Ahrensburg; on Article 82 EC (now Article 102 TFEU): ECJ, WuW 2013, 427 marginal no. 112 - AstraZeneca v. Commission). Due to the special responsibility that a dominant company bears for ensuring that effective and undistorted competition is not impaired by its conduct (para. 74), a threat to competition is already sufficient in this respect.
(1) According to the findings of the Federal Cartel Office, significant parts of the users want a lower level of disclosure of personal data. 46% of Facebook users have stated that they see ʺless disclosed dataʺ as a reason to make greater use of another service instead of Facebook (Question 11, Official Record p. 682). 38.5% of users even expressed their willingness to pay a fee to use the social network as compensation for not collecting data.
(2) It would be expected that with functioning competition, especially without the described barriers to switching resulting from the lock-in effect (para. 44) described above, a range of services would be available on the market for social networks that would take into account user preferences for greater autonomy in allowing access to data that largely reflects their Internet usage in its entirety and that would allow users to choose whether they want to use the network with more intensive personalization of the user experience, such as is associated with the processing of ʺOff-Facebookʺ data, or whether they want to consent only to personalization based on data they disclose when using the platform operator's offering. Facebook does not offer such an unrestricted choice. According to the unchallenged findings of the Federal Cartel Office in the contested decision (para. 654), the currently existing option for the user to decide against allowing advertisements "based on partner data" after registration does not affect either the collection of data from Facebook Business Tools or their linking to the Facebook account. Furthermore, there is no possibility to control the collection and linking of data from other group-owned services.
Such behavior, which cannot (at least also) be assessed as being controlled by demand preferences, can present itself as the exploitation of behavioral leeway that is not sufficiently controlled by competition. It is true that even in the case of functioning competition, it cannot be assumed on all markets that the offers take all demand preferences into account. However, since increasing the reach among users of a social network has a positive effect on the market position of the network operator vis-à-vis advertisers, there is a particular interest on the part of the network operator to reach as many users as possible with its offer. This suggests that demand preferences are a key competitive factor when competition is functioning (see Broemel, Strategisches Verhalten in der Regulierung, 2010, p. 240) and generate corresponding offers.
(1) The objective suitability to impair market conditions on the market for social networks cannot be denied on the grounds that Facebook's market position is characterized by direct network effects on the part of private users because the benefit of the Facebook network for users increases with the total number of persons connected to the network (para. 44). Although it can be assumed that Facebook's market position can only be successfully attacked if the competitor succeeds in gaining a sufficient number of users for the attractiveness of its network within a reasonable time. In view of Facebook's considerable number of users, there are thus considerable barriers to market entry (margin no. 38). However, this does not call into question the objective suitability of the quantity and quality of user data to secure or impair market conditions. The mutual influence of the two sides of the market is not only to be taken into account when determining market dominance (Section 18 (3a) ARC). Rather, because the business model relates to both sides of the market, the effects of the respective conduct may also not be considered in isolation.
(2) It is therefore significant that the more intensive personalization through access to "off-Facebook" data initially enables Facebook to improve its offer compared to current and potential competitors (at least vis-à-vis users who value this). The more data available to Facebook, the more accurate the predictability of user behavior. Not only does this allow Facebook to more accurately evolve the service and tailor future or other business uses and technologies, but it also allows Facebook to more accurately predict user behavior. Moreover, since with each increase in the quantity and quality of the data and data analysis offering provided by Facebook, which is already very large in terms of the number of users, the chance for both current and potential competitors to keep up with this offering decreases, the risk that (potential) competitors will succumb to competition for the advertising contracts required to amortize the network is added to the market access barrier caused by direct network effects.
(3) Against this background, it cannot be assumed that, if sufficiently strong network effects exist, no further increase in the barriers to entry on the market for social networks by expanding data access can be considered. Contrary to the opinion of the Court of Appeal, the opposite does not result from the failure of the social network Google+, which had a higher share of data collection on the Internet with 33% than Facebook with a share of only 6.39%. For in the absence of further findings by the Court of Appeal, this merely justifies the conclusion that good access to competition-relevant data is not sufficient to compensate for the lack of sufficient direct network effects.
(4) Due to the negative effects on competition for advertising contracts, an impairment of the market for online advertising cannot be ruled out either, according to the findings available to the Senate in the summary proceedings. Contrary to the opinion of the Court of Appeal, it is not necessary in this respect to establish that there is an independent market for online advertising for social media and that Facebook has a dominant position on this market. The impairment does not have to occur on the dominant market, but can also occur on a non-controlled third market (cf. on Section 19 (4) no. 1 ARC old: BGH, WuW/E DE-R 2004, 1210, 1211 - Strom und Telefon II).
d) Accordingly, the functionalities provided by Facebook using "off-Facebook" data are an extended service imposed by exploiting the market-dominant position, for which users must accept access by Facebook to their "off-Facebook" data irrespective of whether the extended scope of services is worth this consideration to them. There are no serious doubts that the compulsory expansion of the scope of services is abusive because of the disadvantages for such users who do not want to use these functionalities because of the associated data access and because of the obstructive effects based on the required balancing.
aa) The question of whether the exploitation of a dominant position is abusive must be answered on the basis of a comprehensive assessment and weighing of the interests involved, taking into account the objective of the Act against Restraints of Competition, which is directed at freedom of competition (BGH, judgment of 27. September 1962 - KZR6/61, BGHZ 38, 90, 102 -Treuhandbüro; judgment of July 13, 2003 - KZR 40/02, BGHZ 160, 67, 77 - Standard-Spundfass; judgment of June 7, 2016 - KZR 6/15, BGHZ 210, 292 marginal no. 47 - Pechstein/International Skating Union). This weighing of interests can only ever be carried out on a case-by-case basis (BGH, WRP 2017, 707 marginal no. 30 - Kabelkanalanlagen).
The unlawfulness of the conduct under assessment, in particular the unlawfulness of conditions according to the general standards of the legal system, forms only one - possibly decisive - factor in the weighing of interests, because interests whose enforcement is legally disapproved of may not be taken into account (see BGH, WRP 2017, 707 marginal no. 30 - Kabelkanalanlagen). However, the unlawfulness of contractual conditions used is not a necessary condition for the assumption of abuse.
bb) The need to protect users who attach importance to the fact that the collection and processing of data is limited to what is necessary for the use and financing of the social network and, in particular, does not cover their "off-Facebook" Internet use, is not precluded - contrary to the opinion of the Court of Appeal - by the fact that there is no coercive situation for them and that they can rather decide autonomously according to their personal preferences and values whether they want to use the network.
(1) An abuse of terms and conditions of the kind in question here does not require a situation of coercion in the sense that it is not possible for the market opponent to waive demand in order to avert exploitation, i.e. it is forced to conclude the contract with the market dominator under all circumstances (see BGH, decision of May 26, 1987 - KVR 4/86, BGHZ 101, 100, 104 - Inter-Mailand-Spiel). In these cases, the abuse primarily relates to the exchange of services with the market opponent (cf. Satzky, NZKart 2018, 554, 556) and thus presupposes that there is an exchange of services at all.
(2) The Court of Appeal also failed to recognize that the access of users to the social network Facebook determines participation in social life to a considerable extent, at least for parts of the consumers, so that they cannot be expected to do without it (cf. on the importance of this aspect in the indirect third-party effect of Article 3 (1) GG: BVerfGE 147, 267 marginal no. 41 - Stadium ban). The social network is an important form of social communication. The use of the forum opened for the purpose of mutual exchange and expression of opinions is of particular importance due to the high number of users and the network effects (marginal no. 44) (see BVerfG, NJW 2019, 1935 marginal no. 15). In the absence of a corresponding alternative, the user can at most be said to have made an autonomous decision insofar as he can also forego the use of a non-essential service. However, the protection of consumers against exploitation by a dominant company is not limited to essential products and services.
cc) The constitutionally guaranteed right to informational self-determination particularly requires, in connection with the considerable political, social and economic importance of communication on the Internet - in view of the volume and depth of the data generated - protection of users against exploitation of this communication data through unreasonable disclosure for exploitation by the operator of a social network.
(1) The right to informational self-determination does not contain a general or even comprehensive right of self-determination over the use of one's own data. However, it does guarantee the individual the possibility of exerting a differentiated influence on the context and manner in which his or her own data is made available to others and used by them. It thus contains the guarantee that individuals themselves have a substantial say in the attributions made to them (BVerfG, WRP 2020, 39, marginal no. 87 - Recht auf Vergessen I).
(2) This fundamental rights guarantee also has an effect on the legal relationship under private law and must be taken into account in the interpretation of the general clauses under civil law, which can also include Section 19 GWB (BGHZ 210, 292 marginal no. 57 - Pechstein) (cf. BVerfGE 81, 242, 255 f.; 89, 214, 232 ff.; 115, 51, 66, 67 f.). The mode of operation of fundamental rights in civil law as constitutional value decisions does not mean that their requirements are in every case less far-reaching or less demanding than the directly state-directed protective effects. Depending on the circumstances, especially if private companies - as in this case - move into a dominant position and take over the provision of the framework conditions of public communication themselves, the fundamental rights obligation of private companies may in fact be close to or even equal to a fundamental rights obligation of the state. In this respect, strict structuring requirements for data processing and the link to purpose and purpose limitation - in particular, for example, in interaction with consent requirements - can also be suitable and possibly constitutionally required means of protecting informational self-determination (BVerfG, WRP 2020, 39, marginal no. 88 - Recht auf Vergessen I).
(3) The requirement for the data subject to have substantial decision-making authority over the use of his or her personal data and the link to the purpose and purpose limitation of data processing in interaction with consent requirements is also taken into account by the General Data Protection Regulation. According to Art. 6 (1) DSGVO, the processing of personal data is only permissible if at least one of the conditions mentioned there is met.
According to Art. 6(1)(a) DSGVO, this includes the voluntary consent of the data subject. When assessing whether consent has been given voluntarily, Article 7(4) GDPR requires that the greatest possible account be taken of whether the performance of a contract is dependent on consent to the processing of personal data that is not necessary for the performance of the contract. Recital 43, second sentence, second half of the GDPR emphasizes purpose limitation even more clearly when it states that consent shall not be deemed to be freely given if the performance of a contract, including the provision of a service, is dependent on consent even though such consent is not necessary for performance.
In turn, the necessity of data processing for the performance of the contract constitutes a separate ground of authorization under Article 6(1)(b) of the GDPR. It is based on the idea that the data processing necessary for the performance of a contract is directly based on the data subject's autonomous decision to enter into an obligation with the controller and thus also to enable the processing of data necessary for this purpose (cf. Assion/Nolte/Veil in Gierschmann/ Schlender/Stentzel/Veil, DSGVO, Art. 6 para. 86; Buchner/Petri in Kühling/Buchner, DSGVO, 2nd ed, Art. 6 para. 26; Schantz in Simitis/Hornung/Spiecker, Datenschutzrecht, Art. 6 (1) DSGVO para. 15; Spindler/Dalby in Spindler/Schuster, Recht der elektronischen Medien, 4th ed., Art. 6 DSGVO para. 5; Sydow/Reimer, DSGVO, 2nd ed., Art. 6 para. 18).
(4) Contrary to Facebook's view, the applicability of the right to informational self-determination is not precluded by the GDPR. This is because, insofar as Union law leaves the Member States room for maneuver, the German courts must always also apply the fundamental rights of the Basic Law in accordance with Article 1 (3), Article 20 (3) GG (see BVerfG, WRP 2020, 39, marginal no. 73 - Recht auf Vergessen I). Article 6 (1) (a) and (b) of the GDPR make the permissibility of data processing, as Facebook rightly asserts, dependent on the contractual basis of the legal relationship, unless another permissible circumstance applies, and do not conversely specify a certain content of the contractual relationship. The question of whether a service content from which the necessity of the collection and processing of certain data can result can be effectively agreed is therefore not decided by the General Data Protection Regulation. Nonetheless, its evaluations, as well as the right to informational self-determination, can gain importance in a - as here - necessary weighing of interests.
(5) The protection guaranteed by the right to informational self-determination as well as the binding of data processing to the necessity for the performance of the contract would be significantly impaired by Art. 6 para. 1 lit. b GDPR if a dominant company such as Facebook were able to exploit the importance of access to its social network without restriction in order to define its range of services in such a way as to align the scope of permissible data processing solely with its interest in marketing a stock of personal data of its users generated by Internet use within and outside Facebook and to expand it beyond what is necessary for the use of the social network, disregarding the interests of the user.
The consideration that the data subject must be protected from an arbitrary expansion of the contractual service is also linked to data protection considerations that the contractual service should be defined as narrowly as possible and reduced to the actual core of the services intended by the data subject (cf. BeckOK DatenschutzR/Albers/Veit, 32. Ed., Art. 6 GDPR para. 32; Buchner, WRP 2019, 1243, 1247; EDPB, Guidelines 2/2019 on the processing of personal data under Article 6(1)(b) GDPR in the context of the provision of online services to data subjects, para. 36; EDPS, Opinion 4/2017 on the Proposal for a Directive on certain aspects of contract law relating to the provision of digital content, para. 52; Buchner/Petri in Kühling/Buchner, DSGVO, 2nd ed, Art. 6 para. 26 and 39 f.; Plath/Plath, DSGVO, 3rd ed., Art. 6 para. 35; Schantz in Simitis/Hornung/Spiecker, Datenschutzrecht, Art. 6 para. 1 DSGVO para. 32 f.). However, the determination of the performance characteristic of the contract is a question that precedes the examination of the facts under data protection law.
(1) Without success, Facebook relies on Art. 6 para. 1 lit. c DSGVO.
(a) According to this provision, data processing is lawful if it is necessary for compliance with a legal obligation. As can be seen from the first sentence of Article 6(3) of the GDPR, this refers to an obligation imposed by the law of the Union or of a Member State (see BeckOK DatenschutzR/Albers/Veit, 32nd ed., Article 6 of the GDPR, para. 34; Heberlein in Ehmann/Selmayr, DSGVO, 2nd ed., Article 6, para. 16; Buchner/Petri in Kühling/Buchner, DSGVO, 2nd ed., Article 6, para. 77). Union law or national law must pursue an objective in the public interest in accordance with Art. 6(3) sentence 4 DSGVO. Typical legal obligations in this sense include recording, storage and archiving obligations in commercial, trade, tax and social law (see Plath/Plath, DSGVO, 3rd ed., Art. 6 para. 38).
(b) Insofar as Facebook refers to requests from preventive or repressive authorities with regard to this element of permission, this does not result in permission to collect and process "off-Facebook" data. Insofar as there is an obligation to collect and process the data, this obligation applies to the company that directly generates the "off-Facebook" data. Facebook argues unsuccessfully that all data is required to establish the identity of a criminal. Permission to process data can only be considered if there is a specific reason for doing so; data processing may therefore not be carried out "for stock" (see Heberlein in Ehmann/Selmayr, DSGVO, 2nd ed., Art. 6 para. 17; Buchner/Petri in Kühling/Buchner, DSGVO, 2nd ed., Art. 6 para. 104; Schantz/Wolff, Das neue Datenschutzrecht, Part D, para. 596). The storage obligations of telecommunications service providers pursuant to Section 113a TKG and air carriers pursuant to Section 31a BPolG - not applicable here - constitute an exception (cf. Assion/Nolte/Veil in Gierschmann/Schlender/Stentzel/Veil, DSGVO, Art. 6, marginal no. 92; Frenzel in Paal/Pauly, DSGVO, 2nd ed., Art. 6, marginal no. 17).
(2) The same applies insofar as Facebook relies on Article 6(1)(d) of the GDPR, which permits data processing in order to protect the vital interests of the data subjects or other natural persons.
(3) Nor does Article 6 (1) (f) DSGVO provide any authorization for the processing of "off-Facebook" data. According to this provision, processing of personal data is lawful if it is necessary for the purposes of safeguarding the legitimate interests of the controller or a third party, unless such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require the protection of personal data.
(a) Facebook considers the legitimate interest in the processing of data from third-party sources to be that it serves targeted advertising and thus the financing of the network. Furthermore, it serves measurement and analysis purposes, user and network security, research purposes and the possibility to respond to legal requests.
(b) These may in principle be legitimate interests; in particular, the processing of data for the purpose of direct marketing may be considered as processing serving a legitimate interest (Recital 47, sentence 7, GDPR). However, exceptions and limitations regarding the protection of personal data must be limited to what is absolutely necessary (see ECJ, judgment of 4 May 2017 - C- 13/16, juris para. 30 - Rigas satiskme). It is not apparent, nor has it been shown, that the legitimate interests of Facebook cannot be sufficiently safeguarded by collecting data exclusively within the framework of the social network. It is true that in the administrative proceedings of the cartel authority pursuant to Section 57 (1) GWB - as in the appeal proceedings pursuant to Section 70 (1) GWB - the principle of official investigation applies. Accordingly, the cartel authority must establish the requirements of Section 19 (1) GWB. If it does not succeed in doing so, it cannot issue a cease-and-desist order pursuant to Section 32 (1) GWB. However, Facebook has a duty to cooperate with regard to the presentation of its interests pursuant to Section 26 (2) VwVfG, which is substantiated by the duty to provide information pursuant to Section 59 (1) GWB. The company must provide the antitrust authority with data from its sphere of influence which the authority cannot obtain by other reasonable means (BGH, decision of July 22, 1999 - KVR 12/98, BGHZ 142, 239, 248 et seq. - Flugpreisspaltung; Beschluss vom 15. Mai 2012 - KVR 51/11, WuW 2012, 848 Rn. 17 et seq. - Wasserpreise Calw I; Beschluss vom 14. Juli 2015 - KVR 77/13, BGHZ 206, 229 Rn. 30 - Wasserpreise Calw II). If the company refuses to cooperate in this way, the cartel authority may draw conclusions from this within the framework of the free assessment of evidence. In individual cases, it may come to the conclusion that a certain fact is to be regarded as proven due to the company's refusal to cooperate (BGHZ 206, 229 para. 30 - Wasserpreise Calw II). Since the Federal Cartel Office requested Facebook to provide more detailed information on the permissible element of Article 6 (1) (f) of the GDPR, but Facebook failed to cooperate as requested, the Federal Cartel Office was entitled to base its decision on the assumption that Facebook's interests can be sufficiently safeguarded by collecting data exclusively within the framework of the social network.
ee) The identified impeding effects that are detrimental to (potential) competitors also speak in favor of the abusive nature of Facebook's conduct (para. 92). The fact that adverse effects for (potential) competitors would also arise in the event of a choice for users who opted for the more intensive data usage option does not argue against taking their interests into account. It is true that, when weighing interests, there is generally no need to protect competitors from effects that would also arise in the event of functioning competition. Here, however, the market result deviates from that of functioning competition with regard to such users who, given a genuine choice, decided against a ʺmore intensive personalizationʺ and, consequently, a processing of the "off-Facebook" data. The Court of Appeal fails to recognize this when it states that it is obvious that the obstruction of competition in the horizontal relationship with Facebook cannot depend on whether the private Facebook users consent to the data processing or not.
ff) Facebook's interest in shaping its range of services according to its own ideas, which is to be acknowledged in principle, takes a back seat to the interest of the users in being able to restrict the processing of their data to what is necessary for the use of the social network, in view of the great importance of the legal positions of its users affected, the degree of market dominance and the given market structures and in view of the obstructive effect emanating from the conduct. Facebook is - in accordance with the prohibition order - not prevented from offering its users a "personalized experience" based on a comprehensive evaluation of the user's Internet usage within and outside of Facebook. However, it may not do so under any circumstances in view of its pronounced dominant position in the market without offering its users the choice between such a range of services and a range of services that forgoes the collection and processing of data generated by Internet use outside of Facebook, the transmission of which to Facebook the user has not expressly consented to.
(1) Each company, including a market-dominant company, is in principle free to determine the nature of its economic activity and to decide with which goods or services it wishes to participate in the market. However, the freedom of the norm addressee to shape its business model only exists within the limits set by antitrust law (BGHZ 156, 379, 389 - Electricity and Telephone I). It is excluded where it is abused or leads to a restriction of competition that is incompatible with the objective of the law aimed at freedom of competition. In the context of the necessary balancing of interests, the requirements for the worthiness of protection of the interests pursued by a norm addressee must be increased to the same extent as the dependence of the market counterparty on its offer increases (see BGH, judgment of January 23, 2018 - KZR 48/15, WuW 2018, 326 marginal no. 35 - Vertragswerkstatt). The importance of Facebook's performance (para. 102) for users justifies the restriction of entrepreneurial freedom against this background in view of the anti-competitive effects resulting from the findings of the Federal Cartel Office.
Consumers' freedom of choice is typically guaranteed by the competitive process and its function of coordinating supply and demand. If this coordination function is significantly impaired due to the special market structures (such as the degree of market dominance and the lock-in effect in this case) and the resulting weakening of competitive forces, and if, in addition, it is not to be expected that the existing or possible residual competition will foreseeably help the preferences of the demanders to prevail due to the special market conditions, the prohibition of abuse under Section 19 para. 1 GWB can, depending on the importance of the interests affected, impose special obligations on the dominant company that take into account the choices that customers can expect in the competitive process (on the importance of freedom of choice as a protective purpose of competition law, see Crémer/de Montjoye/Schweitzer, Competition Policy for the digital era, p. 77). This applies all the more if the conduct of the dominant company simultaneously secures or strengthens its market position on the affected or neighboring markets.
(2) In this case, it should be added that Facebook, with its social network, provides a communication platform which, at least for some consumers, determines participation in social life to a considerable extent and is of essential importance for public discourse on political, social, cultural and economic issues. Thus, from the perspective of informational self-determination, the company has a special legal responsibility in structuring the conditions for platform use (see BVerfGE 148, 267 marginal no. 41 - Stadionverbot; NJW 2019, 1935 marginal no. 19).
5 The established infringement of Section 19 (1) ARC justifies the issuance of the contested cease-and-desist order pursuant to Section 32 ARC.
a) Since the General Data Protection Regulation does not contain any requirements regarding the content of the contractual relationship (para. 109) and also does not contain any conclusive provisions, there are no doubts as to the applicability of Section 32 GWB and the competence of the Federal Cartel Office (Köhler, WRP 2018,1269, 1271/1272; Künstner, K&R 2019, 605, 606; Buchner, WRP 2019, 1243, 1244). The fact that data protection law - like the Union and national legal order in other respects - must be observed in the application of antitrust law does not lead to the Federal Cartel Office lacking jurisdiction (Körber, NZKart2019, 187, 194; Karbaum, DB 2019, 1072, 1076; Louven, CR 2019, 352, 356).
b) Facebook unsuccessfully argues that the prohibition of the use of the data (statement under 2 of the order) and the required clarification that the processing will not take place without consent (statement under 3 b of the order) are typical measures under data protection law. The authorization of the Federal Cartel Office in this respect is derived from Section 32 (2) sentence 1 GWB. According to this provision, the cartel authority may prescribe all necessary remedial measures of a behavioral or structural nature which are proportionate to the infringement found and necessary for the effective termination of the infringement. In order to avoid the identified obstructive effects of the processing of "off-Facebook" data without a corresponding choice of the users, the aforementioned measures are necessary and appropriate.
d) Contrary to the opinion of the Court of Appeal, the official decision is not unsuitable for remedying the competition infringement because it does not prohibit Facebook from collecting, linking and using the "off-Facebook" data per se, but only in the event that the private user of the Facebook network does not separately consent to this processing and linking of the additional data. As explained in the context of the balancing of interests, the competitors' need for protection in the present individual case exists only to the extent and for as long as the market result affecting them is not based on a decision by the Facebook user (para. 120).
IV. The enforcement of the order also does not result in any undue hardship for Facebook that is not required by public interests, Section 65 (3) sentence 3 in conjunction with Section 65 (3) sentence 1 no. 3 ARC. Sentence 1 No. 3 GWB.
1 undue hardship pursuant to Section 65 (3) sentence 1 no. 3 ARC exists if the disadvantages threatened by the enforcement cannot be justified under the circumstances of the individual case when weighing the public interest in the enforcement of the order and the interests of the person affected by it. Serious disadvantages are not sufficient in themselves for the assumption of undue hardship. Threats to existence, on the other hand, need not generally be accepted. Even irreparable consequences can only be outweighed by public interests in exceptional cases (cf. OLG Düsseldorf, WuW 2013, 1097, 1098 - Chemikalienhandel II). When weighing up the interests, the prospects of success of the appeal must also be taken into account (cf. BGH, WuW 2016, 249, para. 31 - Energieversorgung Titisee-Neustadt).
2 orders under Section 32 ARC to remedy infringements of Section 19 ARC are always immediately enforceable in the public interest. A special interest in immediate elimination is presumed by the legislator and, unlike the order of immediate enforcement by the antitrust authority under Section 65 (1) ARC, does not require any justification in the individual case (see BGH, WuW 2007, 907 para. 59 - Lotto im Internet).
3 The disadvantages identified by Facebook cannot constitute undue hardship, either individually or taken together.
a) Development and implementation costs for implementing the injunction in the tens of millions of euros, when weighed against the public enforcement interest, do not justify the assumption of an undue disadvantage on their own.
b) The same applies to the expected loss of revenue. It is obvious that the ban reduces the value of the advertising and analysis tools for the advertising customers (cf. margin no. 62). It can therefore be assumed in favor of the applicants that this will entail daily sales losses of a considerable amount. However, this is a disadvantage which is necessarily associated with the enforcement of the injunction for as long as Facebook does not succeed in obtaining user consent for an unchanged retention of its business model.
c) The fact that cross-platform data use makes it easier for Facebook to determine the true identity of users in the event of suspicion of a criminal act is not a consideration that can justify undue hardship. It is true that there is a public interest in establishing the identity of a criminal. However, this does not justify the use of unlawful means.
d) The adverse effects on users that may result from enforcement also do not justify the assumption of undue hardship.
It can be assumed in favor of Facebook that the enforcement - at least for a certain period of time - will result in negative effects for users, namely an inaccurate News Feed ranking, an impairment of the login process, impediments to the connection of users and the discontinuation of the possibility of "cross-posting". However, these are also disadvantages that are necessarily associated with the enforcement of the injunction.
e) The implementation period of 18 months predicted by Facebook also does not justify the assumption of undue hardship. In statement 3 of the order, an implementation period of 12 months is provided for. According to statement re 5, this is suspended and extended once by two months, provided that an admissible application for an order of suspensive effect of the appeal is filed. Admittedly, according to the wording of the order, the suspension ends with the conclusion of the first-instance summary proceedings on this application. However, the Senate understands this for the present constellation of the rejection of the application only by the court of appeal - in agreement with the statement of the representative of the Federal Cartel Office in the oral proceedings - to mean that the suspensive effect only ends with the conclusion of the appeal proceedings. Facebook thus has an implementation period of 14 months after the end of the summary proceedings. In its statement under 7, the Federal Cartel Office has also reserved the right to revoke the order in whole or in part. This allows the time limit to be adjusted in the event of corresponding substantiated arguments. In view of the fact that the time required for enforcement cannot be predicted with certainty at present, this takes sufficient account of the applicants' interests.
f) Since there are no serious doubts as to the lawfulness of the order, the expected long duration of the proceedings also does not justify the assumption of undue hardship.
V. The decision on costs is based on Section 78 sentence 1 GWB.
OLG Düsseldorf, decision of 26.08.2019 - VI-Kart 1/19 (V) -