Facebook's $90M settlement: Privacy abuse enters the realm of economic harm

In one of the top ten largest US privacy settlements ever, Meta has waved the white flag in its fight against a decades-old lawsuit alleging its Facebook social network tracked users of the service even after they were logged out.

The implications for corporate privacy violations could be significant as the settlement now suggests privacy abuse causes economic harm to users.

In addition to the payout, Facebook will be required to erase the data it wrongfully collected.

The lawsuit was originally dismissed in 2017 but revived later in the Federal Court which found Facebook's action caused economic harm and also violated the US WiretapAct.

According to Reuters, Facebook "...used plug-ins to store cookies that tracked when they visited outside websites containing Facebook "like" buttons. Facebook then allegedly compiled users' browsing histories into profiles that it sold to advertisers."

Jason Kint, CEO of DCNorg, a trade association that exclusively represents digital content companies wrote about the practice in the Wall Street Journal in 2014.

This morning on Twitter he noted, "It's worth noting for those who follow me closely, this isn't even a case I have mentioned recently. I say that to you as an indicator of how many lawsuits and how much Facebook has likely violated consumer expectations, civil society, markets and democracy globally."

In particular, Kint flagged a section of the ruling which indicated that unlawfully copying data does economic harm in addition to privacy harm even if it doesn't diminish the value of the data in the plaintiff's hands.

Kint wrote, "I think this single line in the summary arguments may end up being most interesting as it moves the line in data abuse by a major platform beyond individual privacy harm to economic harm even if the value of the data isn't transferred but instead copied/replicated."

He also flagged that the court found that under the US wiretap Act Facebook is not a party to the communications it allegedly intercepted.

The settlement today, while one of the largest data privacy private settlements is dwarfed by the $650 million settlement a Federal Judge approved last year which accused Facebook of violating the Illinois Biometric Information Privacy Act.