Facebook Wins Court Battle Against German Privacy Watchdog Over Real Name Policy

Little more than a week after Facebook (NASDAQ:FB) officially deferred to European authorities on the issue of facial recognition software, the social media giant has landed an important victory in another of its legal battles being waged with various European privacy advocates.

The Associated Press reports that an administrative court in Northern Germany granted Facebook a “suspensive effect” on Friday against an order leveled against the social network by the privacy watchdog Independent Center for Privacy Protection (ULD).

Essentially, this means Facebook will still be able to require its European users to register their social networking accounts and profiles under their real name and close those accounts that do not adhere to the policy. For a company that relies on the sheer volume of users (and their corresponding user activity) for the bulk of its revenue, policing its user base to prevent any more fake accounts from being created is vital to sustaining its business. But the ULD contended that Facebook’s policy in this case was simply “unacceptable that a U.S. portal like Facebook violates German data protection law unopposed and with no prospect of an end.”

The Schleswig-Holstein-based organization originally challenged Facebook’s real name policy last December, arguing that requiring users to register social network accounts violated their freedom for online privacy. The German court’s ruling Thursday did not necessarily dispute this claim, but said that the ULD’s complaint was not applicable since Facebook is only beholden to Irish data protection laws because the company’s European headquarters are based in that country.

Incidentally, Facebook was forced to comply with the demands from the Hamburg Commissioner for Data Protection And Freedom of Information, another German privacy watchdog in its own right, for the same reason that the ULD’s demands were overturned -- Irish data protection laws just happened to overlap with European ones in that case, whereas they’re far less stringent in the case of allowing people to use pseudonyms on Facebook.

The ULD said in a statement released Friday that it will appeal the court’s ruling, with the organization’s head Thilo Weichart describing the court’s ruling as “amazing” and “contradictory.”

A representative from Facebook was not immediately available for comment on this story. However, the company did provide TechCrunch with a statement Friday morning saying that it is “pleased with the decision of the Administrative Court of Appeals of Schleswig-Holstein.”

“We believe this is a step into the right direction,” the Facebook spokesperson added. “We hope that our critics will understand that it is the role of individual services to determine their own policies about anonymity within the governing law – for Facebook Ireland, European data protection and Irish law. We therefore feel affirmed that the orders are without merit.”

Facebook shares dropped more than a percent in Friday morning trading, falling to $28.16 per share shortly before noon.