The AP is reporting that a German court has invalidated a decision of the German privacy regulator, which opposes Facebook’s real names/identities policy. Privacy regulators oppose the Facebook policy on the grounds that German and European privacy and free-speech rules prohibit a ban on fake names.
However the court’s decision is not based on German law. According to the AP report, “The administrative court in northern German Schleswig argued in its ruling Thursday that German privacy laws weren’t applicable because Facebook has its European headquarters in Ireland – which has less far-reaching rules.”
This decision would loosely fall under the heading of “choice of law” in the US, where courts are compelled to decide whose laws apply in situations where two states or federal and state law differ. In this case, Ireland’s law was applied rather than domestic German law.
The data protection regulator said it would appeal the court’s decision.
It’s almost certain that a higher court will not allow the lower-court decision to stand. Otherwise the legal implication would be that German law doesn’t apply to companies doing business in Germany but headquartered outside the country.
Under US law companies doing business in the country are subject to US rules and regulations. There may be very isolated legal circumstances where exceptions are made — but not many.
The German court’s decision is not unlike a foreign-owned oil company being permitted to ignore US environmental rules because those in its home country are looser.