RT @[email protected]

Breaking: In decisions just out, Meta is not only on the hook for privacy fines totaling nearly €400 million, but it must also — quickly — find a new legal basis for its sprawling targeted advertising empire. 🧵

https://pro.politico.eu/news/158293

🐦🔗: https://twitter.com/vmanancourt/status/1610652904188174338

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Can smart EU lawyers with data protection chops help me understand the basic legal proposition of this case?
I get the Art 6 bases for processing, and how Meta’s latest maneuvers (moving from consent to contractual basis) were legally sketchy and made EDPB mad. 1/
But I don’t get at a more fundamental level why “take it or leave it” is not an option. I’m probably out of practice.
2/
Why can EDPB say “Meta, you have to offer this service on different and less profitable terms than you do now”? Why was consent not an OK basis, with FB saying “this version, where you consent to targeted ads, is the one we offer”? 3/
I’m not trying to push back (yet). I assume there’s a good answer, or else I’d see more coverage. But I haven’t found it so far. @[email protected]? @[email protected]? @[email protected]? 4/
I get that the GDPR offers a substantive baseline of privacy protection. So the US’s quasi-contractual, Lochnerian shenanigans won’t cut it. Platforms can’t offer terms below that baseline level of protection and say “the user consented, it’s fine!” 5/
But for processing that the GDPR permits with consent, if controllers can’t say “the consent-based service is the only one we offer,” it seems like there’d be endless cases where DPAs can require an alternate version of a commercial service, with different privacy tradeoffs. 6/
Like “Airlines can’t offer frequent flyer perks — tracking flight history requires consent. But passengers must also have an option to get those perks even if the airline can’t see their flight history.”
7/
It just seems like data protection rules would become deeply enmeshed with, and displace, competition or fair trade rules. 8/
Is the difference that certain kinds of businesses must offer versions that don’t require consent, and that can operate solely on some other basis? 9/

Or that the social network is one service, and the ads are another, so the GDPR rules for the social network can presume that ads are not relevant?

That one also seems like a competition policy question.

9/

Thanks, it’s late here, I assume I missed something. 10/10

@daphnehk This is a great thread and it's something that confuses me too about some of the European rulings I've seen come out.

It seems like the rulings boil down to "Internet companies offering any non-paid service in Europe must offer it free of any obligation whatsoever to the people using the service for free."

@amuse @daphnehk this is not about whataoever obligations, it's about: which law regulates data protection (contract law, or data protection law), and about data protection, so the scope is rather narrow, and not extremely broad as you put it.

@DiogoConstantino @daphnehk I'm probably speaking much more broadly than Daphne was, sorry for being confusing there.

Beyond this specific law and case, just seems to me that the collection of EU perspectives on tech in general seems to be "You can offer free services, but you can't ask anything in return from their users"

I can totally understand from a privacy perspective why that's desirable, I'm having a harder time seeing how that's a feasible way to run tech businesses.

And I'm personally happy to just pay a small fee for ad-free, pro-privacy things but I doubt I'm in the majority.

@amuse @daphnehk running tech business doesn't require personalized advertising, personalized advertising isn't even the only way to do advertising.

If business can't get people to pay for a service that is a failing of the business plan and of the managers.

@amuse @DiogoConstantino @daphnehk isn't this a bit like saying:

seems to me that the collection of EU perspectives on tech in general seems to be "you can offer ride sharing services, but you have to treat your full time workers as employees, not independent contractors"

I can totally understand from a labour law and worker rights perspective why that's desirable, I'm having a harder time seeing how that's a feasible way to run a tech business.

@MechanicalTurk @amuse @daphnehk I'm not, however even if it's that's a fault of the business people and of the business plan, not of the protection of what's an Human Right (privacy), and not a fault of the regulators not allowing business to try to be smart asses and avoid compliance with the Law.

@DiogoConstantino @amuse @daphnehk There is obviously a tension between allowing companies to operate without too much of a regulatory burden, and protecting users, but if you take it to the extreme, you could as easily argue that we can't tax CO2 emissions because it makes it too hard to be an oil company, or that we can't require pharma to run clinical trials, because it makes it too hard for them to be profitable.

If a company can't find a legal business model, good riddance I say.

@MechanicalTurk @amuse @daphnehk I believe personalized advertising shouldn't be allowed at all, but that's not even what's happening as a result of this.

@MechanicalTurk @DiogoConstantino @daphnehk I think it's actually a lot more like the government saying "You can offer ride sharing services, but you can't require the user to enable location sharing to summon the vehicle".

That's technically do-able, but completely changes a major pillar of what the business actually does to operate.

@amuse @MechanicalTurk @daphnehk it's a reasonable requirement for a government to do, if the business can'g operate like that, it shouldn't exist
@amuse @DiogoConstantino @daphnehk it feels like you're conflating the business model and the service provided to the user here.
The ride sharing business needs to know where you are to provide the service the user is getting. A Facebook user doesn't come to Facebook for the great personalised ads, they come there for the social network.
That's why location sharing in your example is explicitly legal under EU law.

@MechanicalTurk it needs to go from where I want to go, to where I want to get, not to track where I'm.

@amuse @daphnehk

@MechanicalTurk @DiogoConstantino @daphnehk Facebook does need advertising to provide the service though - nobody pays for their Facebook account.

@amuse they made their choice. Also personalized advertisng is far from being the only form of avdvertising, it's not even the only form of doing advertising for specific audiences.

@MechanicalTurk @daphnehk

@DiogoConstantino @amuse @daphnehk exactly, they can even just ask for consent and fall back to context based ads for the people that don't give it.
@MechanicalTurk @DiogoConstantino @amuse Just catching up here, useful thread. Thanks. I think the Uber and employment law analogy (and my similar one about emissions from cars) would be apt if the rule were “FB can never offer users this harmful deal.” But isn’t it more like “Users can consent to this deal, but not on a take it or leave it basis. FB must offer an alternative.” @joris since he also mentioned employment.

@daphnehk @MechanicalTurk @DiogoConstantino @joris I appreciate your input!

For me, the question becomes "What is the alternative to take it or leave it basis?"

Like, can FB say "You can have our full service if you consent to tracking, but if you don't you can only have Facebook Lite with videos capped at 360p" ?

If the answer is that FB can provide a lesser service for users who provide less value (to FB) then that seems totally fair.

If the answer is no, FB must provide completely equivalent service to both its money-making users and its money-losing users, then it does still seem like EU is saying "You cannot require users to provide anything at all in exchange for free services" which seems to me like it'd lead, ultimately, to people not offering any free services at all in EU.

Note: I personally loathe Facebook and haven't logged in for a long time, but this is less about defending FB to me and more about thinking through what commerce on the internet looks like under these rules.

@amuse @daphnehk @MechanicalTurk @DiogoConstantino @joris
I think California law says sites aren't allowed to offer lesser service if consumers opt out of having their data sold or shared with third parties. If companies stop offering services here California can always change the law.

@amuse the alternative is to follow the law and change or adjust business model. Both asking for consent and not having personalized advertising (maybe use contextual advertising instead) are definitively viable.

Your proposal/sugestion wouldn't be lawfull because it has nothing to do with the necessity of the user data processing to provide the service.

@daphnehk @MechanicalTurk @joris

@amuse
Your conclusion of the availability of services depends on the wrong premise that it's not possible to provide service if you're not either charging money for it, or doing a particular type of advertising, and that is simply not correct.

@daphnehk @MechanicalTurk @joris

@amuse
Other types of advertising can be as much or even more effective, even if many business people don't think so. Most of them are not educated on the matter and never tried it, because: "it's what everybody does, so it must be the best".

@daphnehk @MechanicalTurk @joris

@amuse
Even if alternative advertising models would be less effective they woud still be effective, and profitable. Having less profits for respecting human rights is a no brainer for most people here in Europe, so laws that reinforce this are very popular, and companies that don't want to accept that wouldn't be very much missed. However they woukdn't leave because the market is too big.

@daphnehk @MechanicalTurk @joris

@amuse
And we do have proof that they wouldn't leave the all EU, because of similar things in the past.
As an example google did stopped providing some services in some countries for some time because of regularion, but not only turned back on that, as it didn't left the EU/stopped offerig affeected services when similar regulation was appproved in the EU.

@daphnehk @MechanicalTurk @joris

@daphnehk
You can definitely argue that the law should have been based on the promise that personalised ads are so wrong that they should simply be completely illegal. You could also argue that there is no problem with tracking and that it should be completely legal (as I'm sure Facebook would argue), but the middle ground they picked is not unprecedented though.
@DiogoConstantino @amuse @joris
@daphnehk
I think the sex analogy is useful: you could argue that sex is so amoral/dangerous/traumatic that outside of procreation, it should be illegal. You could also argue that it's no big deal, and that e.g. requiring sex in return for casting opportunities is fine, and actresses can decide themselves what they want to offer up. We ended up with a middle ground where you can have sex for fun, but consent has to be given *freely*, not as a quid pro quo.
@DiogoConstantino @amuse @joris
@daphnehk
You could have argued that cracking down on the casting-opportunities-for-sexual-favours industry could have led to the collapse of movie roles for young attractive women, in the same way that some are arguing that social networks will go away without personalised ads. In the casting example, we dodged a bullet, and entertainment execs found other reasons to cast women. The economy is different, but I think we'll be lucky when it comes to Facebook also. @DiogoConstantino @amuse @joris
@daphnehk @DiogoConstantino @amuse @joris and, apologies for being a little facetious. Sex is genuinely the best example I can think of where consent has to be given without coercion, but the analogy takes things to a bit of an extreme.

@MechanicalTurk @DiogoConstantino @amuse
@joris

The sex example makes sense as a thing you can’t transact for in most places. (Along with votes, organs, babies, indentured servitude, etc.) But the contract basis means you *can* transact for a data use as long as it’s necessary for the performing of the service. So doesn’t that put you back into needing regulators to make a bunch of weird decisions about these deals?

@daphnehk @DiogoConstantino @amuse @joris because its more fuzzy whether or not the personalised ads are a part of the value proposition of your product?
@amuse @DiogoConstantino @daphnehk Meta can absolutely ask for things 8n return for providing a no-cost service. Just when it comes to things that require consent, like collecting personal information, they have to ASK for that consent, not just assume it. They can refuse to provide service if you don't consent, but they can't leave the whole thing about advertising unsaid and just assumed.

@tknarr That's not how it really goes, they can't refuse service if what they are asking in return is not necessary to provide the service, otherwise consent wouldn't be free and therefore lawful. This is why facebook stopped asking for consent and tried this trick.

@amuse @daphnehk

@DiogoConstantino @amuse @daphnehk Under 6(1)(n), true. However, 6(1)(a) says "the data subject has given consent to the processing of his or her personal data for one or more specific purposes". That's the one that would allow it. And yes, you can say "If you don't consent, we won't offer you service.". There's no coercion there when done BEFORE service is offered and where there's no other requirement that the service be used.
@DiogoConstantino @amuse @daphnehk There are ruling that say demanding consent isn't allowed, but they all involve cases where service has already been extended and accepted and refusing consent will take away something you had before the demand was made. Legally it's the difference between taking the customer's money and then demanding additional terms vs. demanding those terms before you'll ring up the sale.

@tknarr
You're mistaken. Consent can only be requested if it can be meaningful refused without detriment. If the subject feels compeled to consent, the consent is not freely given, and subjects may obviously and easily feel compeled to have the service. It has nothing to do with being before or after.

@amuse @daphnehk

@DiogoConstantino @amuse @daphnehk I'm pretty sure it doesn't work that way. If it did, it would throw offer and acceptance out the window entirely. After all, by your definition their not receiving what was being offered if they didn't accept the terms offered would mean their acceptance was coerced.

@tknarr it does work this way, and this is thr reason why facebook stopped using consent.

@amuse @daphnehk

@DiogoConstantino @amuse @daphnehk So, how then would contracts of any sort work if one party could always claim they were coerced (because they wouldn't receive what you offered if they didn't accept the contract's terms) thus invalidating the contract?

@tknarr This is NOT about contract law. This is about data protection, that is what this decision was also about.

Contracts made under coercion are already effectively null.

@amuse @daphnehk

@DiogoConstantino @tknarr @amuse

It seemed like the lynchpin of DiogoC’s point was “If the subject feels compeled to consent, the consent is not freely given, & subjects may obviously & easily feel compeled to have the service.”

So is this reasoning about contract basis for processing unique to services that are essential or dominant (Facebook, arguably)? If there were 100 social media companies, could one offer targeted ads on a take it/leave it basis?

@daphnehk @DiogoConstantino @amuse It depends, I think, on whether service has already been extended to a user. If it has been, then threatening to take away that service if they won't consent would be coercive. If the user is signing up for new service, though, simply having conditions under which the company will offer service isn't coercive (else simply requiring the customer pay for the merchandise would be coercion, you're not giving it to them if they don't agree to pay).

@daphnehk no, you can still be compeled for reasons of other nature.

@tknarr @amuse

@daphnehk @DiogoConstantino @amuse The problem with his point is that feeling compelled to have the service doesn't mean the service has coerced you into agreeing to it's terms. If that were the case, contract law as the courts interpret it (even in the EU) couldn't exist. But under the law, coercion involves a threat intended to get someone to do something they're legally allowed to not do, or to not do something they're legally allowed to do.

@tknarr it could and exists and if you had followed the complains and against facebook from day 0 you would know they changed from consent to contract because of this.

@daphnehk @amuse

@tknarr contract law and data protection however treat it differently (different requirements and enforcement) and this decision is NOT about contract law is about data protection.

@daphnehk @amuse

@daphnehk @DiogoConstantino @amuse 2/ The problem is that you don't have a legal right to a Facebook account. Even if Meta saying "If you don't consent, we won't offer service.", the user has no legal right to receive service from them until _after_ they've agreed to the terms and Facebook has agreed to provide them service.

Now, once Facebook _has_ agreed to provide them service, it's another matter. Then they do have a legal right to receive service under the agreed-on terms.

@daphnehk @DiogoConstantino @amuse 3/ In the case of the existing user, Meta is now using the threat of terminating service if the user doesn't do something they have every legal right to refrain from doing: accepting a change in the terms of service.

Had Meta changed the terms to require express consent at the time the GDPR went into effect, they could've cited the change in the law as the basis for requiring a change in terms to comply with the law. But it's too late for that now.

@daphnehk maybe this article can help: https://verfassungsblog.de/why-are-you-on-facebook/
I analyzed why the DPC interpretation was problematic. If Facebook can legitimately use contract as its legal basis for processing your personal data for targeted ads, it means that targeted ads are the reason you are on Facebook, which I doubt it is. If targeted ads are not the “counterpart” of the contract, then Facebook cannot process your data on the contract legal basis.
Hope it helps!
Why are you on Facebook?

The NGO None Of Your Business (noyb) recently made public a draft decision sent by the Irish Data Protection Commissioner (DPC) to other European Data Protection Authorities under the GDPR’s cooperation

Verfassungsblog

@daphnehk

I scanned the replies. Did a lawyer ever respond?

@jimgon Yes! On Twitter and here.

@daphnehk

The social media behavior where people respond to a question for input by “expert”, by starting with “I’m not expert, but in my opinion…” really makes life challenging.

@daphnehk the personalized ads are not a requirement for providing social media services.
@daphnehk That’s already the case. See Germany’s Federal Cartel Office 2019 case against FB/Meta regarding data collection based on competition law https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2019/07_02_2019_Facebook.html?nn=3591568
Bundeskartellamt - Homepage - Bundeskartellamt prohibits Facebook from combining user data from different sources