German companies are not legally responsible for the way Facebook processes the personal data of people visiting the companies' Facebook fan pages, a German administrative court ruled on Wednesday, allowing the companies to keep using the pages without violating German data protection laws.
The case highlights the uncertainties facing companies and data protection officials when services are hosted or operated from one jurisdiction, but accessed from another.
In November 2011, the Office of the Data Protection Commissioner (ULD) for the German state of Schleswig-Holstein ordered companies to deactivate their Facebook fan pages or face a fine of up to €50,000 ($67,800). The ULD maintained that Facebook violated German data protection laws by processing personal data of German users on fan pages and using that data for its own commercial purposes. Companies using fan pages were at least partly responsible for the processing of personal data via those pages, the ULD said.
Three organizations challenged the order, suing the ULD in the Administrative Court of Schleswig-Holstein. They disagreed with the ULD and wanted to know if they could legally use Facebook's services, said Marcus Schween, central coordinator for legal affairs at the Chambers of Commerce and Industry in Schleswig-Holstein, one of the plaintiffs.
On Wednesday the court ruled: "According to the Federal Data Protection Act, the plaintiffs are not responsible because they neither have access to the data on a legal nor on a factual basis."
The ULD can appeal the verdict, said court spokesman Harald Alberts.
Facebook welcomed the court's rejection of the ULD's order and said its service is consistent with European law.
Schween said: "Data protection is of considerable importance for the economy of Schleswig-Holstein, but data protection must also leave room for innovations and be adapted for the current challenges. This case shows that the data protection issue is so important that it should not be left solely to the data protection officer."
Thilo Weichert, privacy commissioner and head of the ULD, could not immediately be reached for a comment, but before the verdict was delivered he explained that the ULD started its action against Facebook fan pages two years ago. He has discussed his grievances with Facebook Ireland, which is responsible for the data of Facebook users outside the U.S. and Canada, but to no avail, he said: Because Irish data protection law probably has to be applied in this case, the ULD hasn't been able to compel Facebook to change its policies because the ULD is only able to enforce German law.
The German-Irish legal dilemma has worked to Weichert's disadvantage before. The ULD ordered Facebook in 2012 to start allowing its users to create accounts using pseudonyms, because the company's insistence on real names violated a German law that gives users the right to use nicknames online. But in April, the Administrative Court of Appeals of Schleswig-Holstein ruled that Facebook could keep its real name policy in Germany and didn't have to allow nicknames on its platform.
The right to use pseudonyms online is exclusively found in German law and not in Irish law, the court found. Because Facebook's German subsidiary is only a marketing and sales office and doesn't process any data, Irish law should apply in that case, the court said.