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In an order filed Mar. 18, 2021, Hagens Berman partner and management committee member Shana Scarlett has been appointed co-lead counsel for a class of consumers against Facebook in this antitrust class-action lawsuit. The firm looks forward to leading the case on behalf of the class in a manner that is efficient, thorough and focused on consumers’ rights.

Case Status
Active
Position
Interim Co-Lead Counsel
Practice Areas
Court
U.S. District Court Northern District of California San Jose Division
Case Number
5:20-cv-08815-SVK
Defendant(S)
Facebook, Inc.
File Date

Hagens Berman has filed a class-action lawsuit alleging that Facebook gained an illegal monopoly by exploiting and selling user data. We believe Facebook utilized its own user data to identify emerging threats to its social-media monopoly without properly compensating consumers – or letting them know the extent to which their personal information was being used.

HOW FACEBOOK DECEIVED ITS USERS

Facebook has long sought to differentiate itself by touting the superiority of its privacy protections, but as the complaint states, Facebook routinely made user information available to paid advertisers without informing or properly compensating consumers.

By 2010, “Facebook had become the largest social media company in the world and, unknown to nearly all of its users, had transitioned its entire business to selling social media data, which it did by selling access to developers and selling advertisements targeting Facebook’s network of engaged and active users,” the lawsuit states.

In 2018, a scandal involving a political consulting firm called Cambridge Analytica revealed the extent to which Facebook deceived consumers. The consulting firm was able to access the personal data of up to 87 million Facebook users. In 2019, the Federal Trade Commission and Department of Justice announced that Facebook would pay a $5 billion penalty – the largest ever imposed by the FTC – to settle charges that the company had “deceiv[ed] users about their ability to control their privacy information.”

FACEBOOK WEAPONIZED DATA TO SUPPRESS COMPETITION

Not only did Facebook secretly leverage its user data to sell targeted advertising, but the company also used it to identify emerging competitors which posed a threat to its social-media monopoly. As outlined in the complaint, “Facebook illegally maintains this monopoly power by deploying a buy-or-bury strategy that thwarts competition and harms both users and advertisers.”

As the complaint states, “Rather than competing on the merits, Facebook used the valuable consumer data that it was harvesting to identify incipient competitors with the most likely path to meaningful market share gains.” Facebook would then engage in “a buy-or-bury strategy” and “made clear that it would copy incipient competitors’ innovations and discriminatorily shut off these firms’ access to Facebook’s valuable user data if they did not sell their businesses to Facebook first.”

According to the complaint, this dynamic “made it easier for Facebook to acquire competitors” – including Instagram and WhatsApp – ”at a reduced price.” If a company turned down Facebook’s buy offer, it then faced being strong-armed out of competition. For instance, when Snapchat turned down Facebook’s $3 billion acquisition offer, Facebook launched Instagram Stories, which the complaint states was “nearly identical” to a rival Snapchat product also called “Stories,” and overtook its predecessor in 2017.

YOUR CONSUMER RIGHTS

Had Facebook not engaged in its anticompetitive scheme, the lawsuit states that the company would have been required to provide consumers greater value in return for their data. Instead, Facebook violated antitrust laws by requiring its users to give away things of material value. including personal information and attention. Facebook then sold those things to third parties, including advertisers. The lawsuit seeks recovery for consumers’ losses and other relief to prevent Facebook from harming consumers and destroying competition.

TOP CONSUMER LITIGATION FIRM

Hagens Berman is one of the most successful consumer litigation law firms in the United States, achieving than $260 billion in settlements for consumers in lawsuits against major technology firms, retailers and auto manufacturers. Hagens Berman has achieved record-breaking settlements in antitrust cases, and your claim will be handled by attorneys experienced in consumer antitrust law.

NO COST TO YOU

There is no out-of-pocket cost or fee to join this case. In the event that Hagens Berman or any other firm obtains a settlement that provides benefits to class members, the court will decide a reasonable fee to be awarded to the legal team for the class.

Case Timeline
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Complaint filed
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Date

CASE TIMELINE

Complaint filed

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