On March 6, 2012, the Regional Court of Berlin issued a ruling on a case initiated by the Verbraucherzentrale Bundesverband, the Federation of German Consumer Organisations, against Facebook Ireland Limited. The court took this rare opportunity to object to several key features of Facebook’s user experience and actions:

  1. The court criticized that users are not informed properly during the registration process, that email addresses and names of the user’s contacts are imported by the friend finder functionality without the contact’s knowledge, and that this functionality sends invitations to these contacts to join Facebook without the consent of these contacts. The court ruled that Facebook can no longer use this functionality in Germany without proper information and consent.
  2. The court also ruled on the validity of certain provisions in Facebook’s terms of use, deciding that Facebook may not require the users to grant a comprehensive right to use the users’ content on a worldwide basis without royalty payments. Facebook’s users maintain their rights in any content which is protected by IP rights, e.g. pictures, and Facebook may only use it with the users’ explicit consent.
  3. Another consent Facebook will have to reword is the users’ consent to data processing for advertising purposes. In addition, any changes to the terms of use and its privacy policy need to be communicated to the users sufficiently in advance.

The court held that Facebook’s practice is in violation of data protection laws, constitutes a case of unfair competition and is not compliant with German rules on standard terms and conditions. Users and consumer protection agencies are no longer willing to accept Facebook’s approach to privacy, transparency and intellectual property, and the Berlin court was willing to lead the way. The judgment is not legally binding yet and Facebook announced that it will carefully review the judgment once available in full and will then decide on any action to be taken.