Facebook Inc. (FB): German Court Pursues Fine, Shame

Facebook Inc. (NASDAQ:FB) has been well-documented as having various run-ins over privacy concerns in several countries in Europe over recent years. And now, Facebook is contending with a case in a German court where the company is charged with not upholding German privacy laws by requiring real names on profiles.

Facebook Inc. (NASDAQ:FB) is facing a rather paltry $26,000 fine if it is found by a German court of violating the German law which allows Internet users to be anonymous when using certain Web sites. Facebook, however, has a company policy that requires actual names on its user profiles and among those who socialize on the network.

“It is the role of individual services to determine their own policies about anonymity within the governing law,” said a Facebook Inc. (NASDAQ:FB) spokesman.

While German authorities acknowledge that the fine is miniscule for companies like Facebook Inc. (NASDAQ:FB), they say that the case isn’t about collecting the money as much as public perception of the company.  It may seem that the German government is counting on the public turning cynical on Facebook if it is deemed in violation of Germany’s privacy laws and does not change its business policies.

Is this a big deal for Facebook? Would it really fight a $26,000 fine? Well …

As of 12:45 p.m. ET Tuesday, Facebook Inc. (NASDAQ:FB) stock was trading at $29 per share, down about 1.5 percent on the day.

“We know ($26,000) is nothing for Facebook, it’s just symbolic,” said German privacy commissioner Thilo Weichert. “But if we win the legal process, we are pretty sure there will be a big discussion,” he said. While the process is still in its early stages, Facebook would also have an opportunity to appeal, but also could face further, stiffer penalties (perhaps up to $65,000) if it is found in violation of the law and does not change its policies to be compliant.

Facebook Inc. (NASDAQ:FB) has said it would defend itself passionately. That seems to be an indication that it isn’t about the money – but the company seems to believe that its public perception is more valuable than any attorney’s fees. Would you agree with the assessment? Does Facebook face a risk if it is found guilty of privacy laws? How do you think this would affect Facebook in Germany, and in Europe in general? We liek your thoughts and your perception of Facebook stock and the company in 2013.

DISCLOSURE: I hold no positions in the stock mentioned above.

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