UK Class Action Against Meta Seeks $3.1B for Competition Law Breach

Multibillion-Dollar Lawsuit Filed Against Meta in the U.K.

A significant legal challenge is being prepared against Facebook/Meta, spearheaded by a competition law specialist and supported by substantial litigation funding. The claim alleges a breach of competition law, asserting that Meta misused its dominant position within the U.K.’s social networking landscape over a period of several years.

Details of the Proposed Class Action

If the lawsuit proves successful, Facebook could be obligated to pay approximately $3.1 billion (£2.3 billion) in damages to its U.K. user base.

The class action was formally submitted to the U.K.’s Competition Appeal Tribunal in London yesterday, targeting Meta, the parent organization of Facebook.

The Core of the Claim: Data Exploitation

The lawsuit posits that Facebook should provide compensation to its 44 million U.K. users for the utilization of their data between 2015 and 2019.

The argument centers on the idea that Facebook leveraged the personal and private data of its users – individuals who, due to the platform’s widespread dominance, lacked viable alternative social media options.

In exchange for this data, users primarily received the ability to share personal content with their network of friends and family.

An “Unfair Price” for Access

Dr Lovdahl Gormsen, the claimant, contends that Facebook imposed an “unfair price” on its U.K. users.

This “price” involved surrendering valuable personal data in return for “free” access to the social networking platform, while Facebook simultaneously generated substantial revenues.

Tracking and the “Social Graph”

A crucial element of the case is the assertion that Facebook not only secured its U.K. users within its platform but also tracked their activity through the Facebook pixel on external websites.

This tracking enabled the creation of detailed “social graph” data, providing a comprehensive understanding of user behavior.

The prominence of user data in controversies, such as the Cambridge Analytica scandal, serves as further evidence of potential exploitation.

Legal Representation and Class Details

Quinn Emanuel Urquhart & Sullivan, LLP, represents Dr Lovdahl Gormsen and has formally notified Meta of the claim.

The class action encompasses all individuals residing in the U.K. who utilized Facebook at least once between October 1, 2015, and December 31, 2019.

“Opt-Out” Structure and Funding

This is an “opt-out” class action, meaning U.K. Facebook users will automatically be included in the claim unless they actively choose to exclude themselves.

Innsworth, a major litigation funder, is providing financial support for the case, drawing on its experience in similar consumer class action claims alongside Quinn Emanuel.

Broader Legal Landscape

This lawsuit occurs within a wider context of legal challenges facing Meta, including a consumer class action in the U.S., regulatory scrutiny globally, and an antitrust suit from the FTC that could lead to the separation of Instagram and WhatsApp.

Dr. Gormsen’s Statement

Dr Lovdahl Gormsen stated: “Facebook became the primary social network in the U.K. for connecting with friends and family. However, this dominance was exploited to impose unfair terms, allowing Facebook to leverage users’ personal data.”

She added, “I am initiating this case to recover billions of pounds in damages for the 44 million Britons whose data was exploited.”

Addressing Potential Counterarguments

When questioned about Facebook potentially arguing the availability of alternative social networks like Twitter or Myspace, Dr. Lovdahl Gormsen responded:

“Twitter and other platforms don’t offer the same level of connectivity with family and friends. Facebook’s approach is uniquely positioned.”

The Significance of the Facebook Pixel

Regarding the importance of the Facebook pixel on other websites, Dr. Lovdahl Gormsen explained:

“Users may be aware of Facebook’s data usage, but the pixel tracks activity on third-party websites, expanding Facebook’s data collection beyond what users explicitly consented to.”

She further noted that while users can theoretically opt-out of data tracking, the process is often obscure and unknown to the majority.

Dr. Lovdahl Gormsen’s Expertise

Dr Lovdahl Gormsen holds the position of Senior Research Fellow at the British Institute of International and Comparative Law (BIICL).

She also directs the Competition Law Forum, serves as a Non-Governmental Advisor to the International Competition Network, and is a member of the advisory board for the Journal of Antitrust Enforcement (OUP).

Meta’s Response

TechCrunch contacted Facebook for a statement but had not received a response at the time of publication.