Facebook Users And Shareholders File Four Lawsuits Over Data Harvesting
(Julia Cheever) – Facebook Inc. has been hit with four lawsuits in federal court in San Francisco and San Jose thus far this week in the wake of revelations that a political data firm obtained information about 50 million Facebook users.
One lawsuit was filed by a Facebook user who claims the Menlo Park company acted with “absolute disregard” for her personal information after allegedly representing that it wouldn’t disclose the data without permission or notice.
That lawsuit, filed by Lauren Price of Maryland in San Jose on Tuesday, seeks to be a class action on behalf of up to 50 million people whose data was allegedly collected from Facebook by London-based Cambridge Analytica.
The lawsuit says that during the 2016 election, Price was “frequently targeted with political ads while using Facebook.”
It seeks financial restitution for claims of unfair business practices and negligence. Both Facebook and Cambridge Analytica are named as defendants.
Two other lawsuits were filed in San Francisco Tuesday and San Jose on Thursday by individual shareholders Fan Yuan and Robert Casey against Facebook, Chief Executive Mark Zuckerberg and Chief Financial Officer David Wehner.
Yuan and Casey also each seek make their cases class actions.
They claim the company and the officers are responsible for the financial losses they incurred when the stock price dropped this week following news reports of the data harvesting. The price drop caused Facebook to lose $50 billion of its market value, or nearly 10 percent of its total market value, in two days.
The fourth lawsuit, filed in federal court in San Jose Thursday by San Francisco attorney Jeremiah Hallisey, is a shareholder derivative suit filed on behalf of the company against Zuckerberg, Chief Operating Office Sheryl Sandberg and board members.
Hallisey claims the officers and directors violated their fiduciary duty and also unjustly profited from previous sales of their own shares by failing to prevent, remedy or disclose the exploitation of Facebook users’ personal profiles.
The lawsuit asks for financial restitution to the company as well as a court order requiring Facebook to improve its corporate governance and internal procedures.
The data disclosure allegedly came about when a researcher invited Facebook users to sign up for a psychological survey in 2014, was able to collect data from the friends of 270,000 participants and then provided the data on 50 million people to Cambridge Analytica.
Facebook, which has more than 2 billion users worldwide, had no immediate comment on the lawsuits.
But in a statement posted in its online newsroom on Wednesday, the company said, “Protecting people’s information is the most important thing we do at Facebook.
“What happened with Cambridge Analytica was a breach of Facebook’s trust. More importantly, it was a breach of the trust people place in Facebook to protect their data when they share it,” the company said.
Facebook said it is “taking action on potential past abuse and putting stronger protections in place to prevent future abuse.”
Mark Molumphy, a lawyer for Hallisey, said in a statement, “Facebook’s apology doesn’t do much for the millions of Americans impacted by this conduct.
“It also doesn’t explain why Facebook executives waited three years to inform their loyal users and shareholders of the massive breach,” Molumphy said.