Personal Data as Counter-performance and Consumer Protection. An Unfair Commercial Practices Italian Decision

Jurisprudência

By Donato Maria Matera

On March 30th, 2021, with the decision n. 2631, the Italian Consiglio di Stato ended a dispute concerning an unfair commercial practices case where Facebook was involved.

The most important part of this decision deals with a misleading commercial practice: in particular, the question was if the Facebook’s advertisement that the social service is «for free» can be considered as a misleading behaviour, since consumers are actually «paying» it with their personal data.

Hence, the core issue is the possibility to consider personal data as a counter-performance, or, if one prefers, as a payment method, other than money. The answer to this question has very relevant practical consequences: in fact, if personal data are a counter-performance to a service, this economic operation can be considered as an actual contract and, if the parties are consumers and traders, consumer law can be applicable.

During the trial, the Facebook defence argued that personal data are an extra commercium good and data protection is a fundamental right, so they cannot be sold, traded or reduced to an economic interest. In this sense, as personal data cannot be a counter-performance, the operation where Facebook provides consumers with a digital service is for free and consumer law cannot be applied neither can be configured an unfair commercial practice.

This position seems to be in continuity with a European Data Protection Supervisor Opinion (n. 4/2017), provided with regard to the European Commission proposal for a Directive on certain aspects concerning contracts for the supply of digital content (COM(2015) 634 final). On this occasion the EDPS underlined that personal data are related to a fundamental right and they cannot be considered as a commodity and it defined as «dangerous» the possibility to let people «pay» with their personal data.

The Italian decision goes to a different direction. The judges affirm that Facebook actually capitalizes users’ personal data and make a profit from them. In addition, once a user provides his personal data and successively decides to remove them by a deselecting operation, this causes the loss of some services originally available. According to the Italian judges this circumstance clearly shows how Facebook social services are not for free, but they are a counter-performance to the provision of personal data, for commercial purposes. At the same time is it also clear that, due to their particular legal regime, these data cannot be considered as an actual commodity.

These argumentations lead the Court to consider applicable consumer law and, in particular the one on unfair commercial practices (Directive 2005/29/CE; in Italy this Directive has been transposed in the legislative decree 2005/206, articles 18 and following). In this regard, the judges clarify that there is no contrast between consumer and privacy law (as regulated by the Reg. UE 2016/679), but they provide consumers with a «multilevel» protection, being compatible with each other. This interaction, as many authors had already highlighted, contributes to increase the standard of consumer protection, since it allows to extend the application of certain business-to-consumer remedies to cases where processing of personal data is involved.

In light of these considerations, the Consiglio di Stato claims that a misleading commercial practice was adopted: Facebook represented his service as free, while actually it was not. In fact, as a consequence of this conduct, consumers were unaware that personal data they provided at the time of subscription were used for commercial and remunerational purposes. This circumstance, according to the Italian Court, is likely to materially distort their economic behaviour, falling within the scope of Directive 2005/29/CE.

For these reasons the judges confirm the penalties stated by the Italian independent market Authority (AGCM) to the social networks company, in relation to this practice. This case represents another step in the debate focused on considering personal data as consideration, especially in consumer contracts.  It has become clear that nowadays many business models are based on personal data, and a «data market» exists, as scholars observe. In this context, it would be fundamental the application of consumer law principles and rules to these cases, in order to provide consumers (the weak part) with an actual protection. The first step to be made in order to reach such achievement is the qualification of these operations as contracts where personal data are to be considered the counter-performance.