Meta Platforms, Inc. (Meta) is the subject of a class action in the Competition Appeal Tribunal (CAT) for alleged abuse of dominant position. Dr Liza Lovdahl Gormsen has brought the application and contends Meta has unfairly profited from the personal data of 45 million Facebook users. The application claims Facebook occupied a dominant position in the market with users forced to accept unfair terms and conditions in order to use the platform.
Who is a ‘user’?
The application claims a ‘user’ is someone who meets the following criteria:
- a natural person (i.e. not a company)
- who is domiciled in the UK; and
- who accessed their Facebook account at least once between 11 February 2016 and 31 December 2019.
The action is on an ‘opt-out’ basis which means a user is included in the action unless they specifically choose not to be.
The basis of the action
Meta reportedly makes 98 per cent of its income through advertising on its platforms. Adverts specifically target individual users based off their own personal data which has been sold to the advertisers. The applicant claims making Facebook free is not adequate compensation and is disproportionate to the value gained by Meta.
The action, therefore, comprises of three claims:
- The so-called “Unfair Data Requirement” – Facebook, being the only social media platform of its type in the claim period, abused its dominant position by forcing users to provide personal data to access the platform. Furthermore, the extent of the data collected was disproportionate to the commercial objective.
- The so-called “Unfair Price” – users’ personal data was purchased at an unfairly low price, especially in comparison to the high revenue Meta generated through its sale. It is claimed had Facebook been in a market with workable competition, the high profit margin would not have been possible.
- Other unfair trading conditions – the terms and conditions, aside from being overly complex and long, failed to explain the extent of the personal data collected by Facebook and how it would be commercialised.
The applicant contends the loss to the users can be calculated by reference to the commercial value of their personal data and discounting the value of their access to Facebook. It would be down to the judge to settle the amount of compensation due to each user, but with approximately 45 million possible claimants the total amount would be sizeable. This judgement will consider the real value and cost of getting a digital service for ‘free’.
Checklist for businesses to ensure compliance with the latest data laws
This latest action serves as a useful reminder of how valuable personal data is and all businesses should start by ensuring they can answer ‘yes’ to these three questions:
At Hamlins, we have expertise in supporting the review and update of privacy policies to ensure compliance with the latest GDPR regulations and guidance. If you would like a conversation about GDPR compliance, please contact Matthew Pryke.