The tyranny of large numbers: Could the Facebook class action exceed a trillion dollars?

The tyranny of large numbers: Could the Facebook class action exceed a trillion dollars?

Feature articles |
By Peter Clarke

Indeed, so large is the number of members in the class, that even a relatively small award per class member could give the defendents’ a bill in the region of hundreds of billions of dollars. 

The suit alleges the social media company failed to protect the personal information of 70.6 million Facebook users in the US and more than 1 million in the United Kingdom in 2014. The law suit was also filed against Cambridge Analytica LLC, SCL Group Ltd. and Global Science Research Ltd., organizations that obtained the Facebook user data. It is alleged the data was used to develop and foster political propaganda campaigns that may have influenced the US presidential election in 2016 and the UK’s referendum on Brexit in the same year.

There are five claims in the suit.  For two of the alleged violations – breach of the Stored Communication Act – by Facebook on one count and by Global Science Research Ltd. Aleksandr Kogan and by various SCL and Cambridge Analytica companies on the second, the lawyers are seeking statutory damages of $1,000 per class member at least, as well as punitive damages, attorneys’ fees, and costs.

There is also a claim of negligence and wilful negligence against Facebook and claims of fraud by Facebook and by GSR, Aleksandr Kogan and by various SCL and Cambridge Analytica companies, for which punitive damages, fees and costs are also being sought.

If the case was found for the plaintiffs on all charges but only $2,000 was awarded to each of more than 71.6 million class members, the cost would be more than $143.2 billion. If a higher sum of $5,000 was awarded to each class member the cost could escalate to more than $358 billion.

Next: What about triple damages?

The concept of triple damages for wilful violations could, in theory, take the sums even higher, above a trillion dollars, although it is possible that some thought would be given to the ability to pay and best interests of the plaintiffs.

Facebook’s market capitalization still stands at $465 billion even after the massive data sharing came to light.

“Facebook utterly failed in its duty and promise to secure the personal information of millions of its users, and, when aware that this stolen information was aimed against its owners, it failed to take appropriate action,” said Robert Ruyak, co-lead counsel in the class action suit, in a statement. “We must also make certain that organizations like Cambridge Analytica and their benefactors – the Mercer family and Steve Bannon – are held accountable for this egregious theft and misuse and cannot further exploit it,” he added.

Co-lead counsel Richard Fields said in the same statement: “Facebook has made billions of dollars selling advertisements targeted to its customers, and in this instance made millions selling advertisements to political campaigns that developed those very ads on the back of their customers’ own stolen personal information.”

The full class action complaint, which was filed in the United States District Court for the District of Delaware, can be found here.

Related links and articles:

Scheme lowers cost of IoT Security Foundation membership

Facebook to open startup incubator in Paris, will boost AI

Microsoft to invest $5 billion in IoT

UniqIC formed to bring secure ICs and support to market


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