• by Wendy Davis  @wendyndavis, March 23, 2021

The Supreme Court has rejected Facebook's request to intervene in a closely watched privacy battle over online tracking.

The move leaves in place a decision issued last year by the 9th Circuit Court of Appeals, which ruled that Facebook may have violated a federal law restricting the interception of online communications by tracking logged-out users via the “Like” button.

When Facebook asked the Supreme Court to intervene in the case, the social networking platform warned that the lower-court's decision could expose numerous web companies to lawsuits over tracking.

Specifically, Facebook contended that the privacy dispute “presents a question of critical importance” -- namely whether “certain ubiquitous practices in the technology industry involving computer-to-computer communications violate the federal Wiretap Act.”

The federal wiretap law prohibits companies from intercepting communications without at least one party's consent. Facebook contended it “was not an uninvited interloper to a communication between two separate parties,” but was rather “a direct participant in communications with plaintiffs’ browsers.”

The U.S. Chamber of Commerce and the Silicon Valley lobbying group Internet Association agreed with Facebook. Those organizations said in a friend-of-the-court brief that the 9th Circuit's ruling “threatens to criminalize computer-to-computer communications that are common and fundamental to the operation of modern webpages.”

The legal battle began 10 years ago, shortly after Australian developer Nic Cubrilovic reported that Facebook was able to identify logged-out users whenever they visited sites with a "Like" button.

Facebook initially said a "bug" allowed the company to receive data about logged-out users, and promised a quick fix.

Facebook also said it didn't retain data tying users' identities to sites visited. (Facebook subsequently changed its policies, which now allow some data collection from logged-out users.)

Cubrilovic's report sparked a class-action lawsuit by Facebook users who said the company's data collection violated federal and state privacy laws, as well as its own privacy policy.

Among other claims, the users accused Facebook of violating the federal wiretap law, which prohibits companies from intercepting electronic transmissions without at least one party's consent.

U.S. District Court Judge Edward Davila in San Jose, California dismissed the lawsuit in 2017. He ruled that Facebook didn't “intercept” any communications, and that the users could have taken steps to prevent data transmissions -- such as by blocking cookies, browsing in “incognito mode,” or installing privacy plug-ins.

The users appealed to the 9th Circuit, which revived the bulk of the case, including the claim that Facebook violated the federal wiretap law.

The appellate judges rejected Facebook's argument that a “Like” button on a publishers' site made Facebook a party to the communications between the publishers and users.

“As alleged, Facebook’s tracking practices allow it to amass a great degree of personalized information,” the 9th Circuit Court of Appeals wrote in April. “Facebook’s user profiles would allegedly reveal an individual’s likes, dislikes, interests, and habits over a significant amount of time, without affording users a meaningful opportunity to control or prevent the unauthorized exploration of their private lives.”