Facebook Real Name Policy Challenged by German Privacy Watchdog

A German privacy watchdog has ordered Facebook (Nasdaq: FB) to stop enforcing its policy making users register their real names as a prerequisite to setting up accounts on its social network. While the Menlo Park, California-based social media company began vigorously enforcing its real name policy this fall in the wake of a revelation that some 83 million user accounts were fake, the Independent Centre for Privacy Protection (ULD) said that the social network’s policy is “unacceptable” in a statement issued Monday.

The ULD demanded that the social network begin allowing members to user pseudonyms for their social media profiles, saying that the requirement violates local privacy laws and grants no benefit to consumers.

"It is unacceptable that a U.S. portal like Facebook violates German data protection law unopposed and with no prospect of an end," Thilo Weichert, the country's privacy commissioner and the head of ULD, said in Monday’s statement. "The aim of the orders of ULD is to finally bring about a legal clarification of who is responsible for Facebook and to what this company is bound to."

Facebook promised to “fight” the charge “vigorously” in a statement emailed to the press, saying of the ULD that “the orders are without merit and “a waste of German taxpayers' money.”

“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,” Facebook’s statement added.

The ULD is challenging Facebook’s real name policy on behalf of the German state of Schleswig-Holstein, which according to IT World means that the order could only be enforced in that region, whose largest city is the local capital, Kiel.

Weichert, however, argued that other German data-protection agencies would follow Schleswig-Holstein's lead in establishing a new legal precedent for Facebook.

“Actually, this should be in the interest of the company too,” Weichert said. “We hope for a fact-based debate not aimed at delaying action. In view of the fact that Facebook currently is taking the opportunity from all its members to decide themselves about their own discoverability under their name, our initiative is more urgent than ever.”

Facebook now has two weeks to contest the order in court.

Interestingly enough, another German state took a markedly different stance on social media transparency last October when police requested that Twitter remove an account affiliated with a Neo-Nazi organization. The proliferation of pseudonymous social media accounts could create new problems for German police hoping to regulate hate-speech in the country.

Facebook shares rose around one percent during trading Tuesday, reaching $27.91 in late afternoon trading.