Facebook Hit With Privacy Lawsuit After IPO
The class action lawsuit was filed in federal district court in San Jose, Calif. and combines 21 cases alleging that the site trespassed on its members' privacy rights by tracking them even after they signed out of their accounts, according to PCWorld.
"We believe this complaint is without merit and we will fight it vigorously," Facebook's Andrew Noyes, manager of public policy communications, told PCWorld in a statement.
The lawsuit claims that Facebook violated the U.S. Wiretap Act by monitoring its members Web-surfing activity through "like" buttons embedded on millions of pages throughout the Internet. The complaint stated that the Act, "provides statutory damages of the greater of $100 per violation per day, up to $10,000, per Facebook user," according to Bloomberg.
If the lawsuit succeeds, it could prevent Facebook from collecting so much data and limit its ability to advertise toward users, according to The Telegraph. Facebook generated 85 percent of its revenue last year from advertising. On Tuesday, General Motors pulled its advertisements from the Website, stating that those ads were not helping the company sell automobiles.
“This is not just a damages action, but a groundbreaking digital-privacy rights case that could have wide and significant legal and business implications,” David Straite, an attorney representing some of the users, said in e-mail to Bloomberg.
The Bay Area-based company has found itself at the center of legal battles over privacy rights in the past. Last year, a data-protection agency in Germany said it might fine Facebook over facial-recognition software used for tagging photos.
Facebook priced its initial public offering at $38 per share, placing the value of the company at around $104 billion.