Thursday, 27 January 2022

Facebook faces £2.3bn lawsuit in UK over user exploitation

by Harry Baldock, Total Telecom
Friday 14 January 22

The class action lawsuit claims that 44 million Facebook users were exploited by the company between October 2015 and December 2019

Facebook, now rebranded as Meta, is set to face its first class action lawsuit in the UK, with the claimants seeking at least £2.3 billion in damages. The lawsuit, being brought by competition law expert Dr Liza Lovdahl Gormsen, suggests that the social media platform used its dominant market position to force 44 million users to agree to terms and conditions that allowed their data to be exploited…

Facebook, now rebranded as Meta, is set to face its first class action lawsuit in the UK, with the claimants seeking at least £2.3 billion in damages.

The lawsuit, being brought by competition law expert Dr Liza Lovdahl Gormsen, suggests that the social media platform used its dominant market position to force 44 million users to agree to terms and conditions that allowed their data to be exploited.

Dr Lovdahl Gormsen says that this data allowed Facebook to generate billions in revenue without compensating the users. This is, according to Dr Lovdahl Gormsen, an "unfair price" for customers to pay for access to these services and is in violation of the 1998 Competition Act. 

The suit notes that Facebook did not only collect data on its own platform, but used mechanisms like the advertising tool Facebook Pixel to allow third-parties to monitor the activity of its users.

Facebook makes 98% of its income from advertisers.  

“They are exploiting users by taking their personal data without properly compensating them for taking that data,” said Dr Lovdahl Gormsen, who also called the relationship "completely disproportionate".

“I don’t think the users are entirely clear when they click on the terms and conditions how unfair that deal is.”

Facebook, naturally, contests theses claims.

"They choose our services because we deliver value for them and they have meaningful control of what information they share on Meta's platforms and who with," said the company in a statement.

The case covers around 44 million Facebook users between October 2015 and December 2019 and will operate on an opt-out basis; i.e., affected users will be included in the claim and elligible for a portion of any damages awarded unless they actively opt out of the civil suit.

The claim will be heard by a judge at the Competition Appeal Tribunal. If the judge deems that the case should proceed, the legal process could continue for 6 to 12 months.

This is, of course, not the only major lawsuit facing Meta at this time, with the company currently battling the Federal Trade Commission (FTC) in the US. The FTC is claiming that Meta pursued a course of "anti-competatitve conduct" by buying or otherwise driving its rivals out of the market, and is ultimately seeking to force the company to sell Instagram and WhatsApp in an attempt to break up its market dominance.

Meta has requested that the US courts throw out the lawsuit, claiming it has no factual basis. However, earlier this week a judge denied Meta's appeal, suggesting that the case should go to trial.

 

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