Facebook data privacy lawsuit is worth keeping an eye on

“A case which is likely to be tied up in the courts for some time…”

Large companies getting sued is nothing particularly new, but a lawsuit over whether Facebook has violated the data privacy rights of European citizens might make quite a splash, reports Telecoms.com (Banking Technology‘s sister publication).

As reported back in September, Facebook was slapped with a fine from the Spanish data protection watchdog for inappropriately collecting and using personal information on some of its Spanish users.

In this latest development, and just to be clear, this is a case which is likely to be tied up in the courts for some time, but should Facebook find itself on the losing side the door could be opened. We’re not really used to these type of class action lawsuits, so it is venturing into somewhat unknown territories.

In terms of the top line story, data protection and privacy advocate Max Schrems, is leading a class action suit on behalf of 25,000 individuals, seeking €500 each in compensation. Schrems believes Facebook violated the data privacy rights of European citizens in handing over data to US intelligence agencies.

Should Schrems be successful in his venture, this would firstly prove to be a quite a bill for Facebook. Secondly, there would surely be few more million Europeans who would put their claim against the social media giant. And finally, what about the rest of the US technology companies who handed over information, surely they would be in the firing line as well.

As mentioned before, this is a long way off. The case will take some time to get settled, and even if Schrems does win the initial skirmish, there will almost certainly be appeal after appeal. The stakes are too high for Facebook, and the wider technology community, should Schrems win this fight.

You might not have believed us to start with, but now you might be coming around to our way of thinking; this is one area you should definitely keep an eye on.

For those who don’t know the name Max Schrems, he is an Austrian lawyer, author and privacy activist. Schrems made his name as one of the architects of the fall of Safe Harbour, the mechanism which facilitated data transmission between Europe and the US. Schrems was one of the first to highlight the inadequacies of the treaty in protecting European data privacy rights, mainly due to the sticky fingers of US intelligence agencies, becoming one of the leading figures in battle against Safe Harbour.

Safe Harbour was struck down by the European Court of Justice in 2015, and subsequently replaced by the EU-US Privacy Shield, which Schrems is also critical of. Schrems has good form in the data privacy game, so it wouldn’t be a ludicrous bet to back him.

The case has been facing complications recently though. Finding a suitable court to hear the case has been complicated, as class action lawsuits such as this are not common in European Courts. The Advocate General of the European Court of Justice in Luxembourg Michal Bobek, has said he cannot use claims domiciled outside Austria to file a class action against the company in Austrian courts. This isn’t the end of the matter, but it muddles the situation.

Facebook has also been trying to muddy the waters, arguing Schrems is acting as a company not a consumer, therefore he cannot follow through on such a lawsuit. This claim from Facebook has been shot down however.

There are various legal nuances involved with the case, such as jurisdiction issues in the European Union, but we are not a legal title, therefore will not try to explain such areas. Instead we will focus on implications in the technology world.

As mentioned before, should Schrems beat Facebook, the doors would open. And they will have to be very wide. Estimates vary on how many Facebook users there are in Europe, though it is generally around the 300 million mark. We have no idea how many would sign up to a class action lawsuit, or how many would actually be eligible, but let’s go on the low side and say 0.1%. That is still 300,000 people who would be suing Facebook. At €500, that would still land a bill of €150 million. That’s a lot of money.

And should Schrems beat Facebook, that would set legal precedent. You would then have to ask what other US giants would be in the firing line. Amazon? Google? Apple? Microsoft? Salesforce?

We are speculating massively here, as Schrems has to win the case in the first place. He is facing an uphill battle in finding a court to listen to the case as a class action on behalf of the entire 25,000, but Schrems has shown before that he is resourceful and resilient.

But he does have a good track record. Schrems has thrown a stone into the technology sea, and the ripples could turn into a tsunami under the right conditions.