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A Face-off between Facebook and Digital Heirs in Germany

Karlsruhe, Germany, July 12, 2018. It’s another tiny notch in David’s belt in his battle with Goliath. Germany’s Federal Court of Justice (Bundesgerichtshof – BGH) has cast the die in a five-and-a-half year struggle between the parents of a deceased teenager and social media behemoth Facebook, and the little guy has won. Oddly, this time Facebook was championing privacy. And, lost. What a twist in the land that holds privacy laws high.

What happened?

Well, interestingly what happened remained unknown until possibly now. Tragically, in 2012 a 15-year old girl either tripped, was pushed, or possibly jumped in front of an on-coming local S-Bahn train in Berlin. Was this an accident or a suicide? The parents, shocked and disturbed, contacted Facebook in an effort to gain access to the deceased teenager’s Facebook account. What had happened? What had they missed? They were hoping to find answers.

Facebook on the side of privacy?

But Facebook balked, citing inter alia privacy concerns. The unfortunate girl’s account was put under lock and key. The distraught parents sued. In 2015 the District Court of Berlin found in their favor. But Facebook appealed. And won in the second instance.

Facebook and the deceased

Reportedly more than 3 million Facebook users die in a year, which is about 60,000 a week. Scan the internet and you will find hundreds of grieving and frustrated survivors of deceased Facebook users unable to achieve what they feel best for the loved ones they’ve lost.

What principles lie at the heart of the matter?

German privacy laws, facets of which are anchored in the German constitution, wrestled with German laws of contract and inheritance at the heart of this case. In the end, the BGH came down on the side of German inheritance laws. The Federal Court found that the girl’s Facebook account – like journals or diaries of a deceased – is an asset of her estate.

Digital assets and the estate. What next?

This court decision is groundbreaking. It clarifies the nature of a user account under German law. It is not the domain of the provider’s, but that of the individual.

Now that that principle has been staked out, what happens to cryptoassets of a deceased? Our advice is, better not leave it to the courts, or for that matter to your heirs, to figure it out. Plan ahead.

Implications for B2C companies

The case contains a few other interesting insights for the international practitioner and for companies providing B2C services with a global reach:

  • The courts held that since Facebook was doing business in an EU member state through its subsidiary, Facebook Ireland Ltd, the German courts had jurisdiction over this contract dispute with a German consumer. Articles15(1)(c), 15(2) and 16(1) of Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ 2001 L 012.
  • Similarly, German substantive law of contracts applied because the deceased user had resided in Germany. Article 6(1) Regulation (EC) 593/2008 on the law applicable to contractual obligations (Rome I), OJ 2008 L 177.
  • The German courts then proceeded to apply overriding mandatory consumer protection principles in sweeping aside Facebook’s “Memorialization” policies (a least as they applied at the time of the girl’s death).

Begin succession planning, including your digital and crypto assets, with our succession and financial planning experts. Do not hesitate to contact us.

Continue reading:
German Estate Planning and Inheritance Law
Bitcoin, Blockchain & Cryptocurrencies

Dr. H. Elizabeth Kroeger

Dr. H. Elizabeth Kroeger is admitted to practice in both Germany and the State of California. She brings with her a wealth of over 20 years experience in cross-border transactions, investments, financial planning and structuring. She is also counseling high net worth individuals and family offices in matters of wealth management, including business succession planning, asset protection, charitable planning and philanthropic management.

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