London court: Billion-dollar lawsuit against Facebook dismissed
A number of plaintiffs have accused the tech group Meta and Facebook in particular of abusing a dominant market position. However, the class action with an attractive fine of the equivalent of around 3.4 billion euros failed and was dismissed.
Tech corporations and European law
The world-famous U.S. tech corporations such as Meta, Google, Apple and Co. are regularly accused of disregarding applicable data protection and competition law. In the European Union in particular, this regularly leads to heavy fines. For example, Meta had to pay a hefty sum of 265 million euros as recently as November 2022. The parent company behind Facebook, Instagram and WhatsApp was accused of violations of the General Data Protection Regulation (GDPR). Apple, in turn, is currently in serious trouble with the EU Commission. The body accuses the tech company with its payment service Apple Pay namely blatant violations of competition law. Competition law was now also of great importance in a London court.
In the capital of England, a class action lawsuit against Facebook was being heard. The plaintiffs accused the social media giant of abusing its dominant market position. With a value in dispute of a considerable 3 billion pounds (approx. 3.4 billion euros), this was not just a matter of peanuts. Since Meta, like many other tech companies, is currently in an economic slump, it is no longer possible to pay any fine without a stomachache. Despite economic bottlenecks and mass layoffs, Meta does not want to cut back on the security of its CEO Mark Zuckerberg. The expenses for his personal protection have now been increased from 10 million US dollars to a proud 14 million US dollars.
Class action against Facebook dismissed
The class action lawsuit was dismissed in the London court because the plaintiffs apparently could not conclusively prove the extent to which users were supposed to have suffered harm. However, this is not a final defeat. According to a report from the Reuters news agency, the judges want to give the plaintiffs another chance. Within the next six months, the plaintiffs should be allowed to try again. Behind the class action are the nearly 45 million Facebook users that Britain now counts. In the process, Liza Lovdahl-Gormsen, a renowned expert in the field of competition law, spearheaded the movement.
Unfair compensation for Facebook users
It has long been no secret that Facebook is not a non-profit organization that wants to allow its users to connect for free. Instead, there are tangible profit motives behind the social network. For a long time, quantifying these was a complicated matter. What is certain is that the main source of income is still advertising. And this is only possible because users voluntarily agree to use Facebook and casually provide their data. Meta would now have to compensate its users for this provision of data, if Lovdahl-Gormsen has his way.
Since the Competition Appeal Tribunal (CAT) has granted another attempt, it seems that it is precisely the comprehensible determination of the users’ losses that stands in the way of compensation. For this, a “fundamental reassessment” would have to take place. While the plaintiffs are naturally disappointed with the verdict, Meta appears to be the natural winner of the trial. It is therefore not surprising that a spokesperson for the tech company describes the accusations against Facebook as “completely unfounded.
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