Saturday13 August 2022

Meta Settles 2012 Data Privacy Lawsuit to the Tune of $90 Million.

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Meta (Facebook) has a long history of privacy and other abuses of the platform they control. We have seen everything from abusing facial recognition technology to tracking users’ internet history after existing the platform. These types of abuses are concerning for both obvious and not so obvious reasons. On the surface the collection of personal information outside of actual platform use by Facebook is not a good thing, but when you also roll in the fact that large tech groups like Facebook also share information with government agencies freely and without recourse it makes the problem larger.

In 2012 a class action lawsuit was filed against Facebook for the use of tracking techniques that, according to Facebook, were only supposed to track users while they were logged into the Facebook platform. It was discovered that this was not the case and that Facebook continued to collect browsing information and history on the users even without them being logged into Facebook.

The lawsuit had several ups and downs with Facebook scoring early wins in the case. It was not until they hit the 9th Circuit Court that they hit a snag. The 9th ruled that there was economic harm in the collection and monetization of end user data. This combined with the opinion that the collection took place during communication that Facebook was not a party to (after logging out of Facebook). This violated the Wiretap Act, and the collection would have needed explicit user consent to be legal.

After the ruling by the 9th Circuit and the refusal of the US Supreme Court to even hear the case, Facebook finally came to the table to negotiate a settlement with the class action group. They came to an agreement to payout $90 million for the harm to the users that were tracked. The settlement still needs to be approved, but it would put an end to the legal battle for Facebook. Facebook also must agree to stop the use of and delete all the data it collected. This is more of a symbolic gesture as the data has already served its purpose and the loss of it is of little consequence to Facebook.
This is the same agreement that Facebook made in their $650 Million settlement over their unlawful use of facial recognition technology. However, there are some that feel that Facebook has not actually made good on the deletion of the facial recognition information and that the damage done cannot really be resolved with a monetary settlement.

From a purely legal standpoint, the fact that both cases ended up being settled means there is no legal precedent that future lawsuits can rely on to stop companies from abusing the collection of personal data. These settlements also come at a time when Facebook is ramping up their push of the Metaverse. If either of these two lawsuits had gone to a ruling it could have been bad for Facebook’s future ambitions in that space if they do decide to revisit old practices for user data collection. (Which we feel is likely). It is likely that Facebook needed to settle these to avoid losing investor confidence as well as ensure the short memory of consumers will come into play as they open the Metaverse. You can sort of see this in their statement, "Reaching a settlement in this case, which is more than a decade old, is in the best interest of our community and our shareholders and we’re glad to move past this issue".

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