On Focus

Author: Giulio Monga

Personal Data Protection

Italian Court says that personal data submitted to Facebook are economic assets

Personal data can be considered an economic asset. That’s what Regional Administrative Court of Lazio said (better, confirmed) in a judgment published 10 January last which is likely to become a case-law landmark in Italian data protection and consumer law.

The case raised from a claim brought before the AGCM (Italian antitrust authority) by the associations Altroconsumo, National Consumers' Union and Citizen's Defence Movement against Facebook. A case for which, in December 2018, Facebook Inc. and Facebook Ireland Ltd. were jointly and severally fined by the AGCM for a total of EUR 10 million. Namely, the antitrust authority found Facebook responsible of two unfair commercial practices in violation of Articles 21-22 and 24-25 of the Italian Consumer Code, (Legislative Decree no. 206/2005) respectively. Both practices concern the use by Facebook of personal data of its users. The first practice, considered «misleading» by the AGCM, concerns the lack immediacy, clarity and completeness of the information provided by Facebook during the registration phase of a user to the popular social platform. According to the Court, those lacks specifically concern the activity of collection and use, for commercial purposes, of users’ data. Namely, the AGCM challenged the truthfulness of the claim «It’s free and always will be» showed on Facebook’s homepage. The second practice, qualified as «aggressive», concerned the application of a mechanism for the transmission of platform users' data to and from websites / apps of third parties without the prior express consent of the data subjects. A fine of €5 million was imposed for each infringement.

Coming to the merits of the dispute, it was with regard to the first practice that the AGCM had recognised that personal data could have an economic value. This contrasted, in the opinion of the authority, with the claim of gratuitousness mentioned above. This thesis was also supported by the Lazio Regional Administrative Court, which, ruling on the appeal filed by Facebook against the AGCM measure, confirmed the fine of €5 million for the disputed practice. Actually, the Court confirmed that personal data can be considered as a «negotiable» asset susceptible to economic exploitation. This makes personal data a suitable instrument to be used as a «counter-performance» in a technical sense of a contract. That assumption leads to the consequence that personal data shall be protected as potential object of tradings between the data subjects and operators in the digital market, as well as they are protected according to data protection and privacy legislation.

The Court based its reason on the concept of «capitalization» of personal data. A phenomenon which, according to the Court, requires traders to comply with the requirements of clarity, completeness and non-deception of information under consumer law in their commercial transactions. Consumers, in fact, shall be made aware that, adhering to a contract for the use of service such as the use of a social network, they are also accepting a mutual exchange of performances. In the case of Facebook, the counter-performance of the consumers consists in the provision of their personal data to the owner of the platform. The existence of that performance, given the «capitalization» and the economic value of personal data, makes untruth the Facebook’s gratuitousness claim. Although it does not provide for any payment in money by users, in fact, the social network cannot, according to the Court, be considered as «free». A payment exists and it’s made with personal data. Therefore, the claim «It’s free and always be» shall be deemed as misleading, because the operator must inform the consumers that information obtained from their data will be used from commercial purposes that go beyond the mere use of the social network.

The Court, on the other hand, upheld Facebook's appeal on the second practice, partially annulling the AGCM's decision and thus halving the fine previously imposed on Facebook.

The judgment is interesting not only because it confirms that personal data has an economic value but also because it affirms that, for certain aspects, personal data shall be considered as a bargaining chip suitable to be used as a «counter-performance» in a technical sense of a contract. An important statement for the supporters of the theory according to which personal data is the gold of 21st century.

Giulio Monga