Meta Platforms (Facebook’s owner) is facing another legal headache, but this time in the United Kingdom where it faces a lawsuit that is seeking billions of dollars in damages.
Dr Liza Lovdahl Gormsen, a senior adviser to Britain’s Financial Conduct Authority (FCA) watchdog and a competition law academic, has announced her intention to sue to the social networking giant, Reuters reported.
The £2.3 billion plus interest ($3.2 billion plus) class action lawsuit alleges that Facebook abused its market dominance by exploiting the personal data of 44 million users.
Dr Gormsen reportedly said is bringing the case on behalf of people in UK who had used Facebook between 2015 and 2019.
The lawsuit will reportedly be heard by London’s Competition Appeal Tribunal.
Essentially, the complaint alleges Facebook made billions of pounds by imposing unfair terms and conditions that demanded consumers surrender valuable personal data to access the network for free.
“Our case will argue that Facebook set an ‘unfair price’ for its UK users,” the complaint alleges. “The ‘price’ set for gaining access to the social network was the surrender of UK users’ highly valuable personal data on a take it or leave it basis for using the network.”
Facebook has been notified of the claim by Quinn Emanuel Urquhart & Sullivan, the law firm representing Lovdahl Gormsen.
Quinn Emanuel apparently have a strong track record in bringing consumer claims of this kind.
Opt-out class actions, such as the Lovdahl Gormsen action, bind a defined group automatically into a lawsuit unless individuals opt out.
“I am launching a major class-action claim against Meta for abusing its market dominance for a minimum of £2.3 billion damages on behalf of affected UK Facebook users,” Dr Gormsen tweeted.
“In the 17 years since it was created, Facebook became the sole social network in the UK where you could be sure to connect with friends and family in one place.” Dr Gornsen is quoted by Reuters as saying.
“Yet, there was a dark side to Facebook; it abused its market dominance to impose unfair terms and conditions on ordinary Britons, giving it the power to exploit their personal data,” she said.
The law firm Lovdahl Gormsen alleges Facebook collected data within its platform and through mechanisms such as the Facebook Pixel, allowing it to build an “all-seeing picture” of Internet usage and generate valuable, deep data profiles of users.
The Facebook pixel is a piece of code that can be placed on a website that allows an organisation to measure the effectiveness of their advertising by understanding the actions web surfers take on a particular website.
Pixel is therefore used to ensure an organisation’s adverts are shown to the right people.
The lawsuit alleging that big name social networking firms don’t have the right data privacy safeguards in place, prompted a reaction from Martin Wilson, CEO of Digital Identity Net, a UK fintech seeking to build trust for a safer online world.
“Being online is the new Wild West with most of us not knowing where our personal information goes or how it is used,” noted Wilson. “People envisage hooded hackers on the dark web as the only actors interested in tracking activity and exploiting their personal data, but all sorts of websites, including social media platforms, have a huge amount of information on each of us and they lack the safeguards and controls to protect it.”
“Privacy is an essential human right and these platforms need proper safeguards in place to give people full control of their data and protect against unauthorised access by third parties,” added Wilson.
Facebook meanwhile responded to the UK legal action, and was quoted by Reuters as saying that people used its services because it delivered value for them and “they have meaningful control of what information they share on Meta’s platforms and who with.”
But the UK legal action is another headache for Meta, and comes after it suffered a big setback in the United States this week, when a US federal judge granted the Federal Trade Commission (FTC) permission to filed an amended complaint against the social networking giant.
This means that FTC will get a second bite to go after Facebook over its alleged anti-competitive conduct by buying up rivals and stifling competition.