The case argues that Meta has broken the 1998 Competition Act by setting an “unfair price” for Facebook’s UK users when they are given access to the service. The lawsuit brought by the legal expert Dr. Liza Lovdahl Gormsen argues that the price for getting on Facebook, which does not charge its users, is handing over personal data that generates most of the company’s income.
Worldwide, Meta makes 98% of its income from advertisers, who can target specific demographics and consumers because the company has built up profiles of its users through their online activity.
“They are exploiting users by taking their data without properly compensating them for taking that data,” said Lovdahl Gormsen, who added that Facebook had a “completely disproportionate” relationship with its users. “I don’t think the users are entirely clear when they click on the terms and conditions how unfair that deal is.”
Lovdahl Gormsen, a competition law specialist at the British Institute of International and Comparative Law, is bringing the class action at the Competition Appeal Tribunal in London as an opt-out case. This means Facebook users covered by it do not need to actively join the case to receive damages and will be part of the claim unless they decide to opt-out from it. The lawsuit covers the period from 1 October 2015 to 31 December 2019. If the case is successful, the amount of compensation per user will be settled by the judge. The £2.3bn compensation number cited by the cases’ backers represents an estimate of the damage caused to users.
The lawsuit is being funded by Innsworth, a firm that pays for litigation in exchange for a share of any damages, and Lovdahl Gormsen is being represented by Quinn Emanuel Urquhart & Sullivan, a law firm that describes itself as a specialist in “high-stakes commercial litigation”.
Lovdhal Gormsen’s lawyers have written to Meta, which also owns the photo-sharing app Instagram and the WhatsApp messaging service, to notify it of the claim. The claim will then be heard by a judge at the tribunal, who will decide whether the case should go ahead. If it does go ahead, the case could take between 6 and 12 months.
A Meta spokesperson said: “People access our service for free. They choose our services because we deliver value for them and they have meaningful control of what information they share on Meta’s platforms and who with whom. We have invested heavily to create tools that allow them to do so.”
On Tuesday, a US federal judge ruled that the US competition watchdog could proceed with a breakup lawsuit against Meta. The Federal Trade Commission wants to force Meta to sell Instagram and WhatsApp, in one of the biggest challenges the government has brought against a tech company in decades. Its lawsuit accuses Meta of pursuing a “course of anticompetitive conduct” by buying or crushing rivals.