The Commercial Court number 15 of Madrid has condemned Meta to pay 479 million euros to 87 Spanish digital press editors, as well as various news agencies, due to unfair competition when advertising on Facebook and Instagram violating the GDPR.
The resolution, issued on November 19, partially upholds the lawsuit filed by the Spanish digital press integrated into AMI (Association of Information Media), which considers that Meta’s behavioral advertising improperly uses protected personal data of Facebook and Instagram users. This gave it a notable competitive advantage compared to the advertising treatment carried out by the Spanish digital press.
The ruling, which is not yet final and against which an appeal is possible, is based on article 15.1 of the Unfair Competition Law. It determines that it is considered unfair to obtain an advantage in the market from a competitive advantage achieved by breaking the laws. As happens in this case with the RGPD.
When this regulation came into force in 2018, Meta changed from the legal basis of user consent to the legal basis of the need to execute the contract. According to the GDPR, the legal basis allows the personal data of Facebook and Instagram users to be processed in accordance with the law. If the legal basis is not adequate, the processing of users’ personal data to carry out compartmental advertising that Meta sells to advertisers is considered unlawful.
For this reason, Meta was sanctioned by the Irish Data Protection Commission at the end of 2022. If instead of abandoning the legal basis of user consent it had maintained it, the company would have avoided this infringement and lawsuits like the one it just lost from succeeding.
The illicit processing of this personal data gave Meta a competitive advantage that the digital press in Spain could not match. This led to a negative impact on the media’s advertising revenue from online advertising that appears when reading a news story on the screen.
The plaintiffs indicated that Meta earned, during the five years that the breach of the law lasted, more than 5,281 million euros. The company has not provided its actual accounts even though they were requested during the trial, so the judge who handed down the sentence has assumed that the profits obtained by the company in said period were, if anything, greater than estimated.
As we have mentioned, the resolution is not yet final and can be appealed to the Provincial Court, but it could set a notable precedent in the Spanish advertising sector, since the one offered by the Spanish digital press had to compete with the behavioral one of Meta, carried out based on the infringement in the processing of the personal data of millions of Facebook and Instagram users obtained both from Meta’s websites and from other websites that users browsed through.
In any case, the ruling has a significant impact on the rest of European countries, since Meta’s social networks are provided in the same way throughout the EU, and are subject to the GDPR in all countries. In France, for example, a similar lawsuit against Meta is already pendingwhich could take this resolution into account.
