No more fake names: German court sides with Facebook over pseudonym lawsuit

A regional court in Germany has ruled that Facebook is not subject to German privacy law, thanks to being headquartered in Dublin.

Facebook has scored a major victory over German privacy advocates in the battle over whether users of the social networking site should have the right to use a fake name.

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The Independent Centre for Privacy Protection (Unabhängiges Landeszentrums für Datenschutz or ULD) — a state-sponsored but independent organisation which aims to protect the privacy of internet users — had been trying to enforce a court order obliging Facebook to allow pseudonyms and nicknames .

The ULD had lodged an appeal with the Schleswig-Holstein administrative court of appeals (OVG) against rulings made by the Schleswig administrative court that Facebook — whose European HQ is in Dublin, Ireland — is subject to Irish rather than German privacy law. According to the OVG, Facebook Germany is just an ad sales and marketing organisation, and is separate to Facebook Ireland.

Consequently, as the OVG found Facebook is only bound by Irish law in such matters, the administrative court's ruling that Facebook had to allow individuals to use fake names was effectively repealed.

This decision is, according to the ULD, a severe blow to data and privacy protection, because it means that German data protection law cannot be applied to Facebook directly.

"The court allowed that the applicability of the strict German data protection law is undermined by clever internal organisation in an IT company... For both users and German companies which have to comply with the German data protection standards, it is difficult to understand why an offer for the German market may ignore these standards," Thilo Weichert, the head of the ULD, said in a statement.

"The OVG decisions should be understood by politics as a signal that at European level the data protection regulation currently under discussion must not only enshrine a high standard of data protection, but also assure sufficient enforcement actions. Otherwise, Facebook will by means of organisational tricks keep trying to escape an effective data protection control. We are currently experiencing that international IT companies escape payment of taxes by means of a sophisticated internal organisation. Politics must prevent the development of both, tax havens as well as privacy havens – ie areas without effective privacy supervision," he added.

Facebook did not immediately respond to request for comment.

While Weichert said he finds the decision regrettable, he welcomed an end to ambiguity around Facebook's pseudonyms policy.

Separate legal proceedings to determine whether German data protection law is applicable to German organisations that operate a Facebook fan page have been ongoing since December 2011. The OVG's decision doesn't make any reference to the case, and the ULD is hoping to see the matter cleared up soon.

This is not the first time that German-speaking privacy advocates have tried to see tighter data privacy regulation brought to bear on Facebook. The Austrian student group Europe-v-Facebook, for example, is currently crowdsourcing money to fund a civil case against the social network, claiming it's violating European data protection law. According to its website, the group has secured nearly €40,000 - a long way from the €100,000 they say they need to cover their legal bill.