• by Wendy Davis , March 26, 2024

Siding against Meta Platforms, a federal judge has rejected the company's bid to dismiss claims that it unlawfully collected taxpayers' information from online filing sites.

In a ruling issued late Monday, U.S. District Court Judge P. Casey Pitts held that the allegations against Meta, if proven true, could show that the company violated various state and federal privacy laws by gathering data through the Meta Pixel -- tracking code that's present on numerous sites. 

But the decision -- while a significant defeat for Meta -- wasn't a complete loss for the company because Pitt narrowed the case by dismissing some of the claims, including an accusation that the company "stole" taxpayers' property.

The ruling comes in a battle dating to late 2022, when taxpayers alleged in a class-action complaint that the Meta Pixel wrongly collected their personal financial data from sites operated by H&R Block, TaxAct, and TaxSlayer.

The taxpayers filed suit soon after The Markup reported that the Meta Pixel, was on several popular tax services' sites.

Last July, a separate report released by Democratic lawmakers found that online tax preparation services shared “millions” of users' sensitive information with Meta, Google, and other tech companies according to a new report released this week by Democratic lawmakers. Meta said at the time that it used the data for ad targeting and to train artificial intelligence algorithms, according to that report.

Google is facing separate litigation over the alleged data collection.

Meta urged Pitts to throw out the taxpayers' lawsuit at an early stage. Among other arguments, the company said it didn't "willfully” obtain the information because its policies prohibit websites that use the Pixel from transmitting sensitive information.

Pitts rejected that argument as premature because it relies on facts that haven't yet been proven.

“Meta’s argument presents a question of fact that the court cannot resolve at this stage,” he wrote in a 40-page decision. “Whatever agreements may have been in place, those agreements do not establish as a matter of law that Meta did not intend to receive the information plaintiffs claim was transmitted.”