Tech giant Meta has lost a battle in the European Union’s second highest court over a demand by the European Commission that it hand over documents to be investigated for suspected anticompetitive behaviour by the Facebook group.
The General Court dismissed the action brought by Meta Platforms Ireland, saying that its pleas in law “proved to be unfounded”.
“The court dismisses the action in its entirety,” a court press release said. Meta was ordered to pay costs.
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In 2020, the EU executive ordered Meta to hand over all documents handled by three of its managers that contained certain phrases, and warned that failure to provide the information requested could be subject to a daily fine of €8 million.
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Meta appealed to the court to annul the decision on the basis that the commission had over-reached and that the documents requested were irrelevant or could breach the privacy of employees.
The court heard that the search terms included “very common words” including “big question”, “for free”, “shut down”, and “not good for us”, which Meta objected were too general and would capture irrelevant material.
These were among 83 unique questions posed by the commission regarding Facebook Marketplace, social networking and online classified advertisement providers. The other questions were not disclosed.
The search terms returned 729,417 internal Meta documents, and the case focused on 83,958 that were in contention.
Meta argued that the documents captured included materials “containing private correspondence of employees concerning medical and autopsy reports and correspondence of employees at times of great personal distress”, a court summary read.
As part of mediation, a dedicated virtual data room was organised in which a limited number of investigators would, in the presence of Meta lawyers, review redacted versions of documents in which employee names had been blacked out, and select relevant documents to be placed in their investigative file.
Meta, however, continued to raise concerns about privacy and accused the commission’s document trawl of being too broad.
The court found in favour of the commission, rejecting Meta’s arguments that the executive was over-reaching in its requests. It rejected the arguments on privacy grounds, and stated that the virtual data room was an appropriate arrangement to pursue the general interest represented by the investigation.
The decision can be appealed.
“We take note of the decision of the court and are considering our options,” a Meta company spokesperson said in an emailed statement.
The battle over documents stems from a formal investigation into suspected anticompetitive behaviour by Meta that was announced by the commission.
In December, the commission informed the tech giant that its preliminary view was that it “breached EU antitrust rules by distorting competition in the markets for online classified ads”.
It accused Meta of monopolistic behaviour by tying its online classified ads service, Facebook Marketplace, to the dominant position of its social network Facebook, raising concerns that competitors could not match the advantages enjoyed by the Meta companies by granting all users of its social network automatic access to Marketplace.
In addition, the commission accused Meta of imposing unfair trading conditions on competing online classified advertisements services that use Facebook and Instagram, because its terms and conditions authorise Meta to use ads-related data derived from competitors for the benefit of Facebook Marketplace.
“If confirmed, Meta’s practices would be illegal under our competition rules,” EU competition chief Margrethe Vestager said at the time.
In response, Meta’s head of EMEA competition, Tim Lamb, rejected the assertions, saying: “The claims made by the European Commission are without foundation.”
