Lawsuit filed by newspapers in Spain brings Meta to court for 'unfair competition'

"This is the appetiser, tomorrow is the main course". This is how one of the parties summed up the first of the two hearings that make up the case involving more than eighty newspapers, represented by Spain's Asociación de Medios de Información (AMI) - among them is the Vocento group - against Meta, the parent company of Facebook, for unfair competition.

The day's proceedings included the testimony of three executives from Facebook's Spanish subsidiary: the director of Industry for Spain and Portugal, the director of Agencies in the same region and the director of Privacy Policy in Europe.

AMI's case against Mark Zuckerberg's conglomerate entered the home stretch on Wednesday after a trial that began in December 2023 with the filing of a lawsuit over the sale of digital advertising using personal data, on charges of breaching the General Data Protection Regulation (GDPR). "Personal data is important, but I wouldn't say it's the key to our success," agreed Meta's three witnesses. "What is key is how we process it and the calculations our algorithm makes to provide the best offer to advertisers," they added.

In their complaint, the Spanish media groups argue that the US technology company has "systematically" failed to comply with the GDPR, which establishes the obligation to obtain the express consent of users to process their data for advertising purposes and to segment them in order to launch personalised advertisements.

"In November 2023 the company itself admitted that it did not ask for consent," recalled Nicolás González-Cuéllar, professor of procedural law and lawyer at AMI, at the preliminary hearing held in November. "All the data we collect is obtained with users' consent," countered Cecilia Álvarez-Rivera, Facebook's director of privacy policy in Europe.

In response to questions from Javier de Carvajal Cebrián, Meta's lawyer, the director explained that the company collects first-party data - the data a user provides when opening an account - and third-party data, always, she said, "under the criteria set out in EU legislation". "It is all relevant," she said, adding: "It is not shared with third parties. His words came as a surprise to those present in the Madrid courtroom. "The advertiser tells us who they want to reach, we select the cohort requested and the associated interests, but we do not give out personal data," he said.

On this point, judge Teodoro Ladrón Roda recalled the Schrems case, in which several rulings pointed to the collection and use of personal data by platforms - including those obtained from external sources - and concluded that sensitive data cannot be used in targeted advertising without a solid legal basis.

The hyper-targeted advertising market is one of the main sources of revenue for the big tech companies. "They all do it", Meta's witnesses argued, referring to the audience targeting that is also practised by "traditional media and new digital platforms".

According to Facebook executives' explanation, advertising on its platforms - mainly Facebook and Instagram - is allocated through an auction system. The algorithm weighs the advertiser's bid, the perceived quality of the ad and the likelihood of user interaction. Based on these data, it selects which ad to show. According to these witnesses, the key is not to accumulate large volumes of data, but to process it efficiently and allow campaigns to be adjusted in real time, so that both a large brand and a small retailer can compete on a level playing field.

"What would be Meta's competitors in this respect?" the technology company's lawyer asked Facebook's director of agencies for Spain and Portugal. "Google, Amazon, TikTok, YouTube and also the media," he replied.

Thanks to this specialisation of ads - based on targeting advertising to very specific groups of users based on data such as age, gender, location or interests - the technology platforms have earned millions of euros that the Spanish media are now claiming as unfair competition for not conforming to the rules governing the activity. "We have invested more in technology," defended Zuckerberg's company, which argues that this process is "a misguided attempt by a group of traditional Spanish media to seek compensation from Meta for its own inability to keep up with the global digitisation of the advertising sector".

However, this process is also being replicated in Paris, where the French courts are considering a lawsuit brought by a hundred media companies accused of illegal practices in the advertising sector through the massive collection and use of personal data.

The weight of technology platforms in the advertising market has skyrocketed in recent years, to account for four out of every ten euros of investment in 2023, according to data from the i2p study, prepared by the Media Hotline consultancy together with the advertising control company Arce Media.

"This case is not just a business issue: at stake is the protection of the rights of millions of European citizens whose data has been exploited without their consent. The defence of a transparent and fair digital market is key to ensuring media plurality and the viability of the media in the face of technological giants," added Irene Lanzaco, director general of AMI.

Sentencing is expected to start on Thursday 2 October and, in accordance with the Civil Procedure Act, the decision must be handed down within 20 working days of the end of the sessions.