Allegations that Facebook is profiting from people’s personal information without their permission are at the centre of a class-action lawsuit launched last week against the popular online social network.
The suit, filed by Merchant Law Group, alleges that Facebook changed users’ privacy settings in 2009 without proper consent . . . “in such a fashion as to mislead and induce users into putting their personal information and privacy at further risk.”
The changes allowed users’ information, which may previously have been available only to family and friends, to become public unless users went through a series of complicated privacy settings that are “confusing [and] materially deceptive,” according to the statement of claim.
“People who thought they were improving their privacy position in almost every instance were depreciating their privacy positions, because there was window after window where you had to go to deal with privacy. So at the end of the day, for almost all the Facebook users, they didn’t know that now their privacy was dramatically changed and they had far less privacy,” says class-action lawyer Tony Merchant.
The users’ information is being made available by Facebook to third parties in order to “enhance their profitability,” Merchant says.
“So the company has put itself in a position that it could harvest private information, market that private information, profit inappropriately, and endanger people through the loss of their privacy.”
The suit is seeking damages amounting to the total profits reaped by Facebook through using the information—although Merchant is not sure yet how much that is.
“Whatever it is—and we suspect it’s huge—they ought to be ordered to pay the money back that they are wrongfully receiving. Then it would be distributed to the Facebook users.”
How Facebook profits is through selling targeted advertising that is catered toward the personal information provided by the user, according to the statement of claim. These ads appear throughout the Facebook website and on user pages such as a user’s home page or news feed.
“The data collected from its Users is the key commercial asset Facebook employs to sell advertising and drive traffic to the Facebook.com website,” the claim says.
The social networking giant’s handling of users’ information has been criticized by privacy regulators in both Canada and the United States.
After a 14-month investigation, Jennifer Stoddart, Canada’s Privacy commissioner, last July identified several ways in which Facebook’s practices violated the country’s privacy laws. Facebook was ordered to make improvements or face a federal court.
As a result, the company, which has about 12 million users in Canada, has made a number of privacy-related changes, the most recent of which were announced earlier this month.
However, Stoddart has said that some of those changes have sparked concern among users, and is considering opening a new investigation.
Merchant maintains the changes “didn’t remedy the problems.” In addition, he says, that information is now out there for anyone to access.
“In many instances, the damage has already been done. One of the ways that the damage gets done is harvesters searching the Net take information, and it goes to other places, and you can’t get it back.”
In a May op-ed in the Washington Post, Facebook CEO and founder Mark Zuckerberg assured users that in the coming weeks, Facebook “will add privacy controls that are much simpler to use. We will also give you an easy way to turn off all third-party services.”
He said the principles under which Facebook operates preclude sharing users’ personal information “with people or services you don’t want,” including advertisers.
“We do not and never will sell any of your information to anyone,” Zuckerberg wrote.
Facebook, which has more than 400 million users worldwide, has been criticized for a failing business model and lack of monetization strategy. Industry insiders have long suspected the only foreseeable way for the Palo Alto-based social media site to generate a substantial and sustainable revenue stream is through the sale of its much-coveted personal user data to third parties.
So far, about 400 people have signed on to the class-action suit, which Merchant says should proceed in six months at the earliest. The litigation is pending before the courts and individuals can continue to join the class action.
Merchant Law Group, which has 10 offices across Canada and one in the U.S., has been involved in several high-profile class actions, including residential school litigation, silicon breast implants, and lead paint in toys.
The suit, filed by Merchant Law Group, alleges that Facebook changed users’ privacy settings in 2009 without proper consent . . . “in such a fashion as to mislead and induce users into putting their personal information and privacy at further risk.”
The changes allowed users’ information, which may previously have been available only to family and friends, to become public unless users went through a series of complicated privacy settings that are “confusing [and] materially deceptive,” according to the statement of claim.
“People who thought they were improving their privacy position in almost every instance were depreciating their privacy positions, because there was window after window where you had to go to deal with privacy. So at the end of the day, for almost all the Facebook users, they didn’t know that now their privacy was dramatically changed and they had far less privacy,” says class-action lawyer Tony Merchant.
The users’ information is being made available by Facebook to third parties in order to “enhance their profitability,” Merchant says.
“So the company has put itself in a position that it could harvest private information, market that private information, profit inappropriately, and endanger people through the loss of their privacy.”
The suit is seeking damages amounting to the total profits reaped by Facebook through using the information—although Merchant is not sure yet how much that is.
“Whatever it is—and we suspect it’s huge—they ought to be ordered to pay the money back that they are wrongfully receiving. Then it would be distributed to the Facebook users.”
How Facebook profits is through selling targeted advertising that is catered toward the personal information provided by the user, according to the statement of claim. These ads appear throughout the Facebook website and on user pages such as a user’s home page or news feed.
“The data collected from its Users is the key commercial asset Facebook employs to sell advertising and drive traffic to the Facebook.com website,” the claim says.
The social networking giant’s handling of users’ information has been criticized by privacy regulators in both Canada and the United States.
After a 14-month investigation, Jennifer Stoddart, Canada’s Privacy commissioner, last July identified several ways in which Facebook’s practices violated the country’s privacy laws. Facebook was ordered to make improvements or face a federal court.
As a result, the company, which has about 12 million users in Canada, has made a number of privacy-related changes, the most recent of which were announced earlier this month.
However, Stoddart has said that some of those changes have sparked concern among users, and is considering opening a new investigation.
Merchant maintains the changes “didn’t remedy the problems.” In addition, he says, that information is now out there for anyone to access.
“In many instances, the damage has already been done. One of the ways that the damage gets done is harvesters searching the Net take information, and it goes to other places, and you can’t get it back.”
In a May op-ed in the Washington Post, Facebook CEO and founder Mark Zuckerberg assured users that in the coming weeks, Facebook “will add privacy controls that are much simpler to use. We will also give you an easy way to turn off all third-party services.”
He said the principles under which Facebook operates preclude sharing users’ personal information “with people or services you don’t want,” including advertisers.
“We do not and never will sell any of your information to anyone,” Zuckerberg wrote.
Facebook, which has more than 400 million users worldwide, has been criticized for a failing business model and lack of monetization strategy. Industry insiders have long suspected the only foreseeable way for the Palo Alto-based social media site to generate a substantial and sustainable revenue stream is through the sale of its much-coveted personal user data to third parties.
So far, about 400 people have signed on to the class-action suit, which Merchant says should proceed in six months at the earliest. The litigation is pending before the courts and individuals can continue to join the class action.
Merchant Law Group, which has 10 offices across Canada and one in the U.S., has been involved in several high-profile class actions, including residential school litigation, silicon breast implants, and lead paint in toys.
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