Commentary

Facebook, Others Defeat Privacy Plaintiffs

This last year hasn't just seen an increasing amount of legislative interest in online privacy. It's also seen an influx of privacy lawsuits against Web companies and ad networks.

Included in the roster of cases are lawsuits by people who said their identities were leaked by Facebook to advertisers via referrer headers, suits regarding the alleged use of "history sniffing" technology that can determine which sites people have visited, and litigation rooted in Flash cookies (which can be used to store information even if users delete their HTTP cookies).

Some of the companies who were sued agreed to settlements. For instance, Quantcast and Clearspring, sued for allegedly using Flash cookies, said they would pay $2.4 million to resolve two class-actions alleging that they violated people's online privacy by using Flash cookies for tracking.

But some of the companies have fought back in court. Results so far appear mixed, but at least a few defendants prevailed on the theory that the Web users weren't harmed by the alleged privacy violations.

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Last month, U.S. District Court Judge George Wu in California dismissed a Flash cookie lawsuit against Specific Media, ruling that the consumers didn't adequately allege that they suffered economic injury. The Web users had sued for computer fraud, but that statute only allows people to bring private lawsuits if they have incurred at least $5,000 in damages. The plaintiffs are to file an amended complaint by the close of business today, but whether this one will get any further in court remains to be seen.

In the most recent example, last week Facebook scored a similar victory when U.S. District Court Judge James Ware in the Northern District of California dismissed a case alleging that the company violated users' privacy by transmitting their identities to third parties via referrer headers.

Ware ruled that the Web users hadn't alleged they were injured as a result of the alleged data leakage. He said that the consumers could attempt to refile some counts, but it's unclear whether they'll have any better luck the second time around.

Meantime, what appears to be victories for Web companies could well end up fueling calls for new laws. After all, if enough judges say that no legal remedy exists when companies allegedly violate people's expectations of privacy, lawmakers might decide that it falls to them to enact new legislation addressing that void.

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