Facebook Tagged With $15B Class-Action Privacy Lawsuit On Eve Of IPO

By David Cohen 

What has this world come to when Facebook can’t even enjoy its initial public offering? On the eve of the long-awaited IPO, the social network was the target of a $15 billion class-action suit that consolidated 21 claims of invasion of privacy by tracking Internet usage.

Bloomberg reported that the complaint was filed yesterday in Federal Court in San Jose, Calif., covering alleged violations that took place between May 2010 and September 2011.

David Straite, a partner at Stewarts Law, counsel for some of the plaintiffs, told Bloomberg his firm is exploring ways to add Facebook users from outside of the U.S. to the suit, adding via email:

This is not just a damages action, but a groundbreaking digital privacy rights case that could have wide and significant legal and business implications.

Facebook Spokesman Andrew Noyes told Bloomberg via email that the claims are without merit and the company will contest them.

TechCrunch pointed out that the $15 billion being sought by the plaintiffs represents most of the $16 billion Facebook would net from its IPO at the starting share price of $38.

TechCrunch also detailed how the plaintiffs arrived at the $15 billion figure, saying it is based on U.S. wiretapping law, and quoting the lawsuit:

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).

$1.5 trillion? Maybe Facebook should add some more shares to its IPO.

The lawsuit is embedded below, but here is an example of one of the plaintiffs’ allegations:

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.

Readers: Do you think the timing of this class-action suit was a coincidence?

Facebook Class Action

Brkic v Facebook

Image courtesy of Shutterstock.