Facebook is being sued for £2.3 billion for ‘exploiting users’

A class action lawsuit claims social media giant Meta abused its dominant position and exploited the data of 44 million UK Facebook users.

The claim is being launched by ‘International competition law expert’ Dr Liza Lovdahl Gormsen for a minimum of £2.3 billion damages on behalf of 44 million affected UK Facebook users, and covers the period between October 2015 and Dec 2019.

It is asserted that Facebook (as the firm was called then) ‘abused its market dominance to impose unfair terms and conditions’, which allowed it to exploit their personal data. It is claimed that in collecting this data the company was able to make enormous profits by building up detailed profiles of its users.

A site set up to detail the claim states: “Facebook abused its market dominance to strike an unfair bargain with users, imposing terms and conditions on a take it or leave basis to access to its social network in exchange for users’ highly valuable personal data, and zero monetary recompense.”

The spearhead of the action seems to be about competition laws as much as the act of harvesting data. It’s alleged that since Facebook apparently had the social media market wrapped up during the period, enforcing terms and conditions that asked users to give up their data was exploitation.

The site says: “Users only received “free” access to Facebook’s social network, and zero monetary recompense whilst Facebook generated billions in revenues from its users’ data. This unfair deal was only possible due to Facebook’s market dominance…. Facebook’s intrusive user data profiles became a hugely valuable private asset from which the company obtained excessive profits. In return, we received too little.”

It seems ludicrous to suggest people could or should ever be ‘paid’ to use Facebook, but the broad thrust of the claim is fairly clear.

As it stands Dr Gormsen’s lawyers, Quinn Emanuel Urquhart & Sullivan, LLP, have written to Meta to notify them of the claim. They say this will be the first of its kind against Meta in the UK.

Anyone with half an eye on the tech world will recognise that collection data to sell targeted ads has been par for the course for tech firms for years. And actually we’d wager it’s pretty much understood and accepted, if not celebrated, by plenty of non-techies, too.

When Facebook launched its IPO for $104 billion in 2012, it was one of the largest of its kind, leaving many commentators at the time confused because Facebook didn’t ‘produce’ anything. It was valued this highly because of its ability to sell targeted advertising based on the information of its user base, and indeed that’s how it makes the vast majority of its cash now. So on one hand taking them to court at this stage feels a bit like someone announcing that they’ve just discovered fizzy pop is full of sugar.

It could be argued this is a case of legislature slowly but earnestly getting up to speed with what the tech industry turned into a decade or so ago, finally getting to grips with it in 2022 and saying ‘sorry, you’ve been doing what?’

There’s also the more political trend of governments starting to worry about the size and influence of tech firms. There’s a fair amount of this friction going on in the US at the moment, with the House of Representatives seemingly wanted to curb the power of big tech in some way, but not sure exactly how to do that.

And maybe the concern is warranted. It is easy to characterise the meteoric growth of a few Silicon Valley technology giants over the last decade or so as scary, and the process of harvesting data to sell on to third parties as at least a bit creepy, and perhaps even existentially worrying if extrapolated to what that could be used for in another ten years.

But as they say in tech circles, it’s not a bug, it’s a feature. And it’s not just the blue whales of the tech world that do it – vast swathes of the digital economy is by this point in some way based on data collection and behaviour analysis designed to monetise free platforms.

Yes, a key pillar of the claim is that Facebook had a monopoly during the period (though that could surely be argued by this point, certainly with regards to anyone under 30) but were this lawsuit to be successful, a precedent could be set could that could have huge ramifications for other companies as well.

Oh and if you are wondering, £2.3 billion split 44 million ways comes out to £53 each. Not that you’ll see it, but it’s interesting to note an extremely rough valuation of your personal data by a lawyer.