Legal Newsline

Thursday, September 19, 2019

As Facebook faces class action, likelihood of other platform companies being sued increases


By John Breslin | Jun 29, 2018

SACRAMENTO (Legal Newsline) - As Facebook faces a deeply damaging class action suit over its admitted sale of data to third parties, the potential that other social media and tech companies will be hauled before the courts is increasing in likelihood.

But insiders with knowledge of the actions against Facebook, which were consolidated early June in the Northern District of California, believe it will take a whistleblower within a company to come forward for others to face similar scrutiny, and potential legal action.

One of the attorneys involved in the Facebook action, John Yanchunis, said this scrutiny of the privacy rights on individuals will not end with this case.

"In 21st century, Information is the new currency and the monetization of information allowed (Facebook) to grow into one of the biggest companies in the world," Yanchunis, of Tampa-based Morgan and Morgan, told Legal Newsline.

This monetization of data by all social media platforms needs to be curtailed, Yanchunis said, but he believes any changes will be "out of consequence, not conscience."

Facebook, and  Cambridge Analytica, which ultimately received, through another party, the personal information of potentially tens of millions of people, are the defendants in the class action proceeding in federal court in the Northern District of California. They are accused of unalwfully breaching the privacy of some 87 million users.

The explosive claims first broke in March after former Cambridge Analytica employee, Christoper Wylie, stepped forward to reveal details to the London-based Guardian newspaper and the New York Times.

Pressure on Facebook and other Silicon Valley giants, including Google, is increasing on other fronts, particularly following the signing Thursday of the California Consumer Privacy Act, the most stringent and sweeping in the country

Gov. Jerry Brown signed the act into law just hours after it was passed in State Assembly and Senate, tellingly with unanimous approval.

Under the act, which takes effect in 2020, users of platforms will have the right to know what information is collected, and what is being shared with third parties. They can also bar companies from selling data.

Further, 37 attorney generals have signed a letter demanding answers from Facebook. In Miisouri, Attorney General Josh Hawley, who is running for Senate, has taken a step further and sent an offical civil investigation demand to Facebook, and earlier to Google.

In the Northern District of California, 30 class actions against Facebook and Cambridge Analytica, filed in various parts of the country, were consolidated with U.S District Judge Vince Chhabria presiding.

Yanchunis, the Florida lawyer involved in the Facebook action, said he has no direct knowledge of other companies or other social media-type companies being sued for violation of privacy, yet.

The attorney explained that Facebook did indicate it was in favor of the actions being consolidated, but otherwise are waiting for the consolidation to be cemented by the judge in California before replying to the underlying complaint.

The Florida lawyer has previously successfully led a class action over privacy issues, and so balks at the idea that the Facebook matter is entirely unique or landmark.

Yanchunis was lead counsel in a class action against various data aggregate companies - Experian, R.L. Polk, Acxiom, and the parent company of LexisNexis - accused of selling information obtained via motor vehicle records, including licenses and car registration. The action was settled for $200 million in 2009.

"It was the same type of data compromise, data breach," Yanchunis said. "The arguments were similar but there have been changes since."

Those changes include the rapid rise in use of social media and other platforms, but also advancements in privacy law, particularly in California.

Even before the latest privacy act, California had some of the some of the most "robust protections for consumers," Yanchunis said.

The consolidated suits now before the California court claim that Facebook permitted "third parties to exploit its lax to non-existent enforcement practices."

"Facebook stood idly by while an app developer, Aleksandr Kogan, sucked down the data portfolios of

70 million of its American users," the complaint states. His UK-based company Global Science Research then passed the "treasure trove" to Cambridge Analytica.

"The aim was to create so-called psychographs of the targeted Americans so that they could be used to influence voting," the complaint alleges.

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Organizations in this Story

Missouri Attorney General Josh Hawley Morgan&Morgan U.S. District Court for the Northern District of California

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