Facebook Faces Consumer Action

5 March, 2018

Blue circle with facebook sign

Following a recent EU ruling, ‘privacy activist’, Max Schrems, can bring an individual action as a consumer against Facebook.  However, he cannot bring a class action on behalf of 25,000 others in relation to Facebook’s privacy practices.  EU regulations generally state that proceedings can only be started in the member state where the defendant is domiciled (where the defendant lives).  However, where a person is a ‘consumer’, they can bring a claim in the country that they, the consumer, live.

Mr Schrems used his private Facebook account for publishing books, lecturing, operating websites, fundraising and being assigned the claims of other Facebook users.  Facebook tried to argue that these activities meant that he was not a consumer, but a ‘professional litigant’.  The Court of Justice of the European Union (CJEU) however, ruled that he was still a consumer because the use of his account was ‘predominantly personal’.  He therefore can bring an action in Austria, the country where he is domiciled.

A further question before the court was whether Mr Schrems could bring a class action and pursue claims assigned to him from 25,000 other Facebook users. The court directed that he would not be allowed to pursue a class action on behalf of others. The consumer exception is limited to the specific parties to the contract.

Mr Schrems has a long-running dispute with Facebook over their privacy policies and their data-sharing with US spy agencies.  He was behind the recent decision that brought about the collapse of the EU-US Safe Harbour framework, which had allowed Facebook Ireland to transfer data to Facebook USA.  Fundamentally it was a data sharing scheme. 

This recent decision puts an end to Mr Schrems plans to bring a class action, however, he is now free to pursue Facebook as a consumer, where he is domiciled, in Austria.  He insists that he will use this decision to bring a ‘model case’ against Facebook instead.

Case: Schrems v Facebook Ireland Ltd (Case C-498/16)