Toronto law firm preps Facebook privacy suit

The firm behind the complaint, which alleges that Facebook knowingly deceives users into releasing far more information than they would otherwise, is a prolific class action litigator.

Caroline McCarthy Former Staff writer, CNET News
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.
Caroline McCarthy
3 min read

A Toronto-based law firm with a history of targeting litigation at corporations as varied as chocolate companies and silicone breast implant manufacturers has a new company in the crosshairs: Facebook.

Merchant Law Group, which has offices in 10 Canadian cities, last week launched litigation seeking class action status against the massive social-networking site, alleging the mishandling of sensitive user data--the latest development in a resurgence of action against the social network's privacy policies, after it looked for a while as if all the fuss had calmed down.

The suit alleges that Facebook changed user privacy settings and its terms of service without adequate consent from users, rendering a significant amount of information public to the Web when it had once been protected. The lead plaintiff is a Winnipeg, Manitoba, resident named Donald J. Woligroski, and the complaint alleges that he "has been subject to, inter alia, breach of privacy and the misappropriation of his personal information and, in the addition or alternative, the conversion of said information for commercial use through the materially deceptive conduct of the Defendant"--that defendant being Facebook.

Facebook spokesman Andrew Noyes said via e-mail on Thursday morning that as of Wednesday, the company had not received the complaint; later on Thursday morning he provided an update. "We see no merit to this suit, and we will fight it vigorously."

The suit additionally alleges that Facebook "intentionally or negligently designs its privacy policies, as disseminated to users in such fashion as to mislead and induce users into putting their personal information and privacy at further risk," that these policies mean that user data can be unwittingly exposed to the harms of data mining, identity theft, harassment, and plain old embarrassment, and that Facebook has unjustly profited off of this member information.

It's seeking damages equivalent to the total amount of money that Facebook has made through the use of that member information.

But pursuing Facebook's privacy policies is just a single case in a massive portfolio of suits for which Merchant has sought class action status--chasing a virtual ambulance, if you will. Merchant Law Group specializes in these suits, and its Web site lists ongoing class action litigation against numerous pharmaceutical companies, toy manufacturers, telecommunications companies that charged for 911 emergency calls, and "chocolate producers (who) conspired to keep chocolate prices in Canada artificially high."

Facebook has, however, been the subject of legitimate scrutiny in Canada, where well more than 40 percent of the population is estimated to have a Facebook profile (citing statistics in the court complaint). Last year, the office of the Canadian Privacy Commissioner took issue with Facebook's user privacy controls, a stance that was influential enough to cause Facebook to make some notable product modifications.

When Facebook made public many of the controversial revisions to its privacy policy this spring, a coalition of U.S. senators led by Charles Schumer of New York took notice and announced its opposition. A press conference led by Facebook CEO Mark Zuckerberg announced some modifications that seemed to quell the critics. But this week, new ones popped up: data protection officials in Germany announced a probe into Facebook's practices of visitor data retention, and a market research study of Facebook's U.S. traffic highlighted a slowdown--meaning that perhaps the controversy over Facebook's privacy practices actually had an impact on user activity.

This post was updated at 8:51 a.m. PT with comment from Facebook.