Clifford Chance

The German Federal Office of Justice has issued a fine of two million euros against Facebook Ireland Limited for violations of the Network Enforcement Act (Netzwerkdurchsetzungsgesetz – NetzDG), which allows users to report illegal content on platforms to social network operators on 3 July 2019.

Background

According to the NetzDG which entered into force in Germany on 1 October 2017, operators of social networks which have 2 million users or more in Germany and receive more than 100 complaints per calendar year about unlawful content are obliged (i) to produce half-yearly German-language reports on the handling of complaints about unlawful content on their platforms are (ii) to publish these reports in the German Federal Gazette and on their own website no later than 31 July or 31 January, respectively. 

The reports published on the website have to be easily recognisable, directly accessible and permanently available and shall in particular cover the following:

• number of incoming complaints about unlawful content in the reporting period (i.e. previous half year), broken down according to whether the complaints were submitted by complaints bodies or by users, and according to the reason for the complaint
• organisation, personnel resources, specialist and linguistic expertise in the units responsible for processing complaints, as well as training and support of the persons responsible for processing complaints
• number of complaints in the reporting period that resulted in the deletion or blocking of the content at issue, broken down according to the issuer of the complaint 
• measures to inform the person who submitted the complaint, and the user for whom the content at issue was saved, about the decision on the complaint.

Furthermore, the operator of a social network is obliged to maintain an effective and transparent procedure for handling complaints about unlawful content (section 3 NetzDG). The provider must supply users with an easily recognisable, directly accessible and permanently available procedure for submitting complaints about unlawful content.

Violations of these obligations can be sanctioned with a regulatory fine of up to five million euros. 

Fine for Facebook

The fine of two million euros issued against Facebook by the German Federal Office of Justice (Bundesamt für Justiz – BFJ) is based on the following grounds:

• The BFJ finds that the transparency report issued by Facebook in Summer 2018 is incomplete because Facebook did not list all complaints received. In its first transparency report under the NetzDG, Facebook disclosed the number of complaints as amounting to 1704. In relation to the size of the social network (over 32 million active users in Germany), the BFJ deems this number too low and accordingly finds that the report is incomplete (for comparison: YouTube reported about 215,000 complaints, Twitter about 260,000). 
• The reason for the significant difference in reported complaints results from the fact that Facebook provides two different reporting ways to report problematic content to its users, one for complaints under the NetzDG and one for general complaints. The complaints form for the NetzDG is located on subpages of the imprint and therefore difficult for users to recognise and access. The general complaints form is easier accessible, and the chosen design allegedly leads users to the general complaints form. Facebook only included the complaints issued using the NetzDG complaints form in its transparency report. The BFJ is of the opinion that all complaints, irrespective of their communication channel would need to be included in the transparency report. Only then, the public would get a clear picture of the extent of unlawful content on the social network and the way the social network deals with it.
• The BFJ further criticised that the report was incomplete due to not all complaints which led to a deletion or blocking in the reporting period were disclosed. Such requirement is of particular importance for the supervisory authority as the verification of the efficiency of the complaint's procedure depends on such information. 
• Furthermore, the published transparency report is criticised to be incomplete with regard to the information on the organisation, the linguistic expertise in the units responsible for processing complaints and the training of the persons responsible for processing complaints.
• As a last critic, the BFJ finds that the report is incomplete as the information on the notifications to complainants and users does not clarify whether these notifications contain a statement of reason for the decision on the reported content.

Comment

This fine is the first issued against a social network operator under the NetzDG in Germany. With two million euros, the BFJ opted for a substantial fine, which is in line with the general approach taken by supervisory authorities in Europe with regard to social media networks (e.g. 50 million euro fine by the CNIL against Google for GDPR violations). The NetzDG has, however, been heavily criticised in Germany from its early days, and it remains to be seen whether Facebook makes use of its objection right to challenge the fine – and the NetzDG. According to publicly available information, Facebook is currently reviewing the decision and considering an objection.