$16B Should Cover It: Here’s The $15B Facebook Privacy Class Action Suit, And Facebook’s Response

Facebook, which has now listed on NASDAQ, is set to make $16 billion if its share holds at the $38 price that it set yesterday — more if it ends higher. Here’s a coincidence: that’s just north of the total amount in damages, $15 billion, that a new class-action case is seeking against the social network over privacy invasion.

Filed in U.S. Federal Court in San Jose, California, the case (embedded below) combines 21 separate cases that have been filed in different courts in the U.S. in 2011 and 2012 — as the plaintiffs look for strength in numbers. All of the cases are connected to “Internet tracking,” or how Facebook tracks users when they are browsing the wider web outside of Facebook’s own pages, even after they have logged out of Facebook.

Facebook has already responded to the case with a flat statement of denial of guilt. “We believe this complaint is without merit and we will fight it vigorously,” a spokesperson told TechCrunch.

A lawyer from one of the firms representing the plaintiffs, David Straite from Stewarts Law Partners, said in a statement (via Bloomberg) that they were looking at how to include people outside the U.S. in the suit, too.

Here’s an example of one of the plaintiffs’ complaints from the suit:

“Plaintiff Davis is a Facebook user and during the Class Period had an active Facebook account. Plaintiff Davis, using the same computer on which Facebook installed tracking and session cookies, visited websites with Facebook-integrated content after logging out of her Facebook account. Contrary to its policies, Facebook intercepted Plaintiff Davis’ electronic communications and tracked her internet use post-logout. Plaintiff did not consent to post-logout tracking.”

The suit also goes through a lengthy explanation of how it believes that Facebook uses cookies for tracking purposes. Perhaps more damningly, it also includes excerpts of how Facebook itself has admitted to some of this tracking activity, and its “inconsistent public statements” regarding this. (Facebook has called the tracking “inadvertent” and a “bug”, but has also said it tracks for safety reasons.)

How did the lawyers for the plaintiffs arrive at the $15 billion figure? It is based on U.S. Wiretapping law, which “provides statutory damages of the greater of $100 per violation per day, up to $10,000, per Facebook user,” the lawsuit says. It bases its calculation on 800 million members, although now that number stands at 901 million, according to Facebook’s most recent S-1 filing. And it looks like there is also a second calculation in the complaint for even more money extending to over $1 trillion dollars. According to the suit:

“Plaintiffs are thus each entitled to the greater of $100 of statutory damages per day (corresponding to $15 billion for the Class), or $10,000 each for the ongoing violations during the class period (corresponding to $1.5 trillion for the Class).”

Facebook has been embroiled in other privacy issues and how it handles user data — ironically the company has proposed a new privacy policy that is currently open for comment until 5PM Pacific time today (Friday, May 18). If those privacy changes do not go through, it could represent a big setback for Facebook and how it wants to implement new services that will potentially generate revenue for it in the future, such as around advertising.

It may have hit a bump on this: as we wrote earlier today, a Facebook activist group in Austria has rallied opposition and over 7,000 people have commented on the proposal. Facebook has a provision that states if 7,000 or more people comment on a proposed change to it policy, then it takes the policy to its entire active user base — currently 901 million people — to get their opinion. If 30 percent vote for or against that proposal, that decision will be binding.

Facebook is currently working through a list of changes suggested by the Irish Data Protection Commissioner that would make the social network more transparent in how a users data is used, and gives individual users more control over that data.

Other run-ins over privacy have included a case in Germany over the use of facial recognition software in photos: that case is still ongoing and may result in fines against Facebook, Bloomberg writes.

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