German court rules Facebook default privacy settings unlawful

A Berlin-based court ruled Monday that large parts of Facebook's default privacy settings and conditions of use have violated German consumer law.

The Higher Regional Court ruled in favor of the Federation of German Consumer Organizations (known by its German initials as VZBV), which launched a lawsuit against the U.S. social media company in August 2015.

The ruling dictates that Facebook's several default activations are inappropriate, including a feature of its mobile phone app that pinpoints the location at which the user is chatting unless the function is turned off. The state-level court said Facebook failed to guarantee that users were aware that their whereabouts had been shared.

The judges decided that all of the five settings which VZBV complained about were unlawful.

Additionally, the court decided that eight clauses in Facebook's terms of use were against German consumer law and hence ineffective. These include pre-formulated declarations of consent allowing the company to use users' personal data, such as names and profile pictures, for commercial purposes and transfer them to the United States.

Concerning Facebook users' choice of name, the company originally insisted that users use "real names" on the site but later changed its policy, requiring users' "authentic names" instead, which means users are allowed to use any name they are widely known by. The revision was ruled unlawful by the court as well.

However, VZBV failed in its attempt to ban Facebook in using the marketing slogan "Facebook is free." The consumer organization argued that the slogan was misleading as users effectively paid for Facebook's services with the data they surrendered to the company.

According to the Spiegel magazine, both Facebook and VZBV have appealed the court's decision, which is not yet legally-binding. Facebook is under no obligation to change its settings until the court hammers out a final settlement of the dispute.

Commenting on Monday's verdict, a Facebook spokesperson said that the judges had agreed with the company's argument "in several aspects," adding many of its terms had changed "a lot" since the beginning of the trial.

"We are working hard to ensure that our guidelines are unambiguous and easy to understand, and that the services offered by Facebook fully comply with prevailing laws," Facebook said in a statement.