As Facebook celebrated going public on Friday with one of the biggest IPOs in history, the world's largest social network was also slapped with a $15 billion class-action suit.
The suit, filed in California, combines a total of 21 cases from across the US, and claims Facebook invaded the privacy of its users by tracking them across the Web even when they were signed out of the service.
The social network is being accused of violating the Federal Wiretap Act. This allows for statutory damages of $100 per day per violation, up to a maximum of $10 000 per user. It has, however, been reported that similar cases filed under the wiretap law have been dismissed, because browser cookies are not considered “wiretaps” and damages to users are difficult to prove.
If the case is successful, however, and damages are paid out across Facebook's 900 million user base, it would total more than $15 billion. The case is being brought by the law firms Stewarts Law and Bartimus, Frickleton, Robertson & Gorny.
In a press statement, partner at Stewarts Law David Straite says: “This is not just a damages action, but a ground-breaking digital privacy rights case that could have wide and significant legal and business implications."
Just not true
It has been reported that the claims of the class-action could potentially harm Facebook's business model, which hinges on its ability to collect data about its users in order to serve targeted advertising. According to Facebook's regulatory filings with the Securities and Exchange Commission, 85% of its revenue stems from advertising.
When Facebook's user tracking was first exposed last year, the social network claimed the tracking information from logged out cookies are used only for safety and protection - including identifying spammers, detecting unauthorised access to accounts and disabling registration for under-age users.
At the time, Facebook engineer Arturo Bejar said: “Please know that also when you're logged in (or out) we don't use our cookies to track you on social plugins to target ads or sell your information to third parties. I've heard from so many that what we do is to share or sell your data, and that is just not true.”
Share