Facebook Sued For $15 Billion In Suit Over User Tracking
By Kit Chellel and Jeremy Hodges - May 18, 2012 6:39 AM ET
Facebook Inc. (FB), which is scheduled to begin trading today, was sued by users of its social network in an amended class-action case claiming the company invaded their privacy by tracking Internet usage and seeking $15 billion.
The lawsuit, filed in Federal Court in San Jose, California, combines 21 cases filed across the U.S., according to a statement by Stewarts Law US LLP, one of the firms leading the claim. It accuses Facebook of improperly tracking users even after they logged out of their accounts.
Facebook, which sold stock in an initial public offering valuing the company at about $104 billion, has been scrutinized by regulators in the U.S. and Europe over how it protects users’ private data. Last year, a German data-protection agency said it may fine the company over facial-recognition software used for tagging photos.
“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, a Stewarts Law partner, said in the e-mailed statement.
Iain Mackenzie, a London-based spokesman for Facebook, declined to comment.
Straite said his firm is “evaluating the way in which non- U.S. residents can be” added to the group of plaintiffs.
Lawsuits accusing the Menlo Park, California-based company of tracking user data even when they were logged out have been filed across the U.S. A California judicial panel ordered in February they be consolidated and heard in the company’s home state.
$10,000 Per User
The U.S. Wiretap Act “provides statutory damages of the greater of $100 per violation per day, up to $10,000, per Facebook user,” according to the lawsuit. The plaintiffs are therefore “each entitled to the greater of $100 of statutory damages per day, or $10,000 each for the ongoing violations” or $15 billion for all of Facebook’s more than 800 million members.
Facebook sold 421.2 million shares, which will trade on the Nasdaq Stock Market, at $38 each to raise $16 billion, it said in a statement yesterday. That values the Menlo Park, California-based company at $104.2 billion, or 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential.
The case is In re: Facebook Internet Tracking Litigation, 5:12-md-02314-EJD, U.S. District Court for the Northern District of California (San Jose).
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