Facebook Seeks Dismissal of $15 Billion Privacy Suit

Facebook Inc. (FB) said a $15 billion lawsuit accusing the company of secretly tracking the Internet activity of its users after they log off should be dismissed because the subscribers didn’t specify how they were harmed.

The complaint suffers from an “utter lack of allegations of any injury to these particular named plaintiffs,” Matthew Brown, a lawyer for Facebook, today told U.S. District Judge Edward Davila in San Jose, California. The plaintiffs haven’t identified what websites they visited, what kind of data or information was collected, or whether Facebook used it or disclosed it to anyone else, Brown said. “They have not done anything close to that.”

The lawsuit consolidates similar complaints filed on behalf of U.S. residents who subscribed to Menlo Park, California-based Facebook from May 2010 to September 2011 in 10 different states, including California, Texas and Alabama.

Facebook, the world’s most popular social-networking service, has been scrutinized by regulators in the U.S. and Europe over how it protects users’ private information. The consolidated case in San Jose claims that while Facebook users consent to the company’s installation of “cookie” files on their computers to track and transmit their Web browsing, they don’t consent to such monitoring after logging out of Facebook.

“Generalized allegations of harm suffice” at this stage of the case to survive Facebook’s attempt to dismiss it, Stephen Grygiel, a lawyer for the users, told Davila at today’s hearing.

“We were users, we used the computers in the way we were entitled to,” and Facebook, “through a trick,” intercepted users’ electronic communications with third party websites, which amounts to a violation of federal wiretap and stored communications laws, he said. “Nowhere in Facebook’s privacy policies does the company say, ‘We are involved in your communication with third party websites after you log out.’”

The U.S. Wiretap Act provides for damages of as much as $100 per violation per day for each Facebook user, according to the complaint.

The case is In re Facebook Internet Tracking Litigation, 5:12-md-02314-EJD, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net;

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.