independent

Sunday 20 April 2014

Facebook sold private messages to advertisers, lawsuit claims

Facebook: workplace ban
Facebook: workplace ban

Facebook is being sued over claims it sells users’ private messages to advertisers without their consent.

According to a complaint filed in California, the social network “misleads users into believing they have a secure, private mechanism for communication, when in fact Facebook... mines user data and profits from those data by sharing them with third parties”.

The lawsuit, brought by Facebook users Matthew Campbell and Michael Hurley, who are seeking class action status, stems from claims in 2012 that the website scans private messages for information that is used to work out how many “likes” a page has. At the time Facebook said “no private information has been exposed”.

On the latest lawsuit, a Facebook spokesman said: "We believe the allegations are without merit and we will defend ourselves vigorously."

It comes less than a month a US court ruled that investors could pursue claims against the social network over its $16bn IPO in 2012.

A group of shareholders left out of pocket by the initial public offering in May last year, have spent the past year arguing that Facebook and its bankers left material information out of the “S-1” document it filed ahead of its market debut.

In particular, they claim that Facebook should have published more information about the impact growing mobile usage was likely to have on revenues at the social network, including internal forecasts which the company passed on to the banks underwriting its IPO.

Facebook and the banks involved in the legal row claim that the information was immaterial, and that it was under no obligation to make such disclosures.

However, Robert Sweet, US District Judge in Manhattan, sided with the investors, clearing the way for them to lodge a slew of claims against Facebook and dozens of banks, including Morgan Stanley and Goldman Sachs.

Telegraph.co.uk

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