U.S. Supreme Court rebuffs Facebook appeal in user tracking lawsuit

FILE PHOTO: A 3D-printed Facebook logo is seen placed on a keyboard in this illustration

By Andrew Chung

(Reuters) - The U.S. Supreme Court on Monday turned away Facebook Inc's bid to pare back a $15 billion class action lawsuit accusing the company of illegally tracking the activities of internet users even when they are logged out of the social media platform.

The justices declined to hear Facebook's appeal of a lower court ruling that revived the proposed nationwide litigation accusing the company of violating a federal law called the Wiretap Act by secretly tracking the visits of users to websites that use Facebook features such as the "like" button.

The litigation also accuses the company of violating the privacy rights of its users under California law but Facebook's appeal to the Supreme Court involved only the Wiretap Act.

Four individuals filed the proposed nationwide class action lawsuit in California federal court seeking $15 billion in damages for Menlo Park, California-based Facebook's actions between April 2010 and September 2011. The company stopped its nonconsensual tracking after it was exposed by a researcher in 2011, court papers said.

Facebook said it protects the privacy of its users and should not have to face liability over commonplace computer-to-computer communications. Facebook has more than 2.4 billion users worldwide, including more than 200 million in the United States.

The case centers on Facebook's use of features called "plug-ins" that third-parties often incorporate into their websites to track the browsing histories of users. Along with digital files called "cookies" that can help identify internet users, the plaintiffs accused Facebook of packaging this tracked data and selling it to advertisers for profit.

Facebook said it uses the data it receives to tailor the content it shows its users and to improve ads on its service.

A federal judge dismissed the case in 2017 but the San Francisco-based 9th U.S. Circuit Court of Appeals in 2020 revived it, allowing the Wiretap Act and state privacy claims to go ahead.

"Facebook's user profiles would allegedly reveal an individual's likes, dislikes, interests and habits over a significant amount of time, without affording users a meaningful opportunity to control or prevent the unauthorized exploration of their private lives," the 9th Circuit said in its ruling.

The Wiretap Act prohibits eavesdropping on electronic communications, but exempts people who are parties to the communication - the designated sender or receiver of the information.

In its appeal to the Supreme Court, Facebook said it is not liable under the Wiretap Act because it is a party to the communications at issue by virtue of its plug-ins.

"Facebook was not an uninvited interloper to a communication between two separate parties; it was a direct participant," the company said in a legal filing.

(Reporting by Andrew Chung in New York; Editing by Will Dunham)