German Court Rules Facebook Users Eligible for Compensation

BERLIN (Reuters) – A German court announced on Monday that Facebook (NASDAQ:META) users whose data was illegally obtained in 2018 and 2019 are entitled to compensation.

The Federal Court of Justice (BGH) determined that losing control over one's data online qualifies for damages without needing to demonstrate specific financial losses.

Thousands of Facebook users in Germany are seeking compensation from parent company Meta due to inadequate data protection, following incidents where unauthorized parties accessed user accounts using guessed phone numbers.

These claims originated from a 2021 data breach involving information gathered through the Facebook friend search feature. A lower court in Cologne had previously dismissed these claims but must now re-evaluate them.

While the plaintiff sought damages of 1,000 euros ($1,056), the BGH indicated that around 100 euros would be reasonable, even without proof of financial loss.

The Karlsruhe-based court ruled that the lower court must assess whether Facebook's terms of use were clear and understandable, and whether users' consent to data use was voluntarily given.

Meta has historically resisted paying compensation, asserting that those affected could not demonstrate concrete damages. A spokesperson for Meta criticized the BGH's ruling as "inconsistent with the recent case law of the European Court of Justice, the highest court in Europe," positing that similar claims have been dismissed 6,000 times by German courts, with many judges ruling out claims for liability or damages. The spokesperson also noted that Facebook's systems were not hacked in this incident and there was no data breach.

Approximately six million people in Germany were impacted by this leak.

($1 = 0.9471 euros)