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Facebook faces suit over data allegations

Hannah Kuchler
Thursday, 2 Jan 2014 | 6:20 PM ET

Facebook is facing a class-action lawsuit over claims the social network monitors users' private messages to sell the data to advertisers.

The plaintiffs allege Facebook systematically intercepts private messages to obtain data it shares with marketers, giving the company an advantage over other data aggregators.

(Read more: Facebook still a firm adult favorite, Twitter falls behind)

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The suit cites independent research that it claims has found that when a user shares a link to another website in a private message, it is recorded to contribute to a profile of the sender's web activity.

It also said the guidance Facebook gives to web developers states that a link in a private message can contribute to the number of "likes" that a page – which can represent, for example, a company or a band – receives.

The class action has been brought by Facebook users Matthew Campbell from Arkansas and Michael Hurley from Oregon, on behalf of all Facebook users in the U.S. who have sent links via private messages. It said the number is likely to be in the millions as there are more than 166 million Facebook account holders in the country.

(Read more: Facebook monthly active users)

"Representing to users that the content of Facebook messages is "private" creates an especially profitable opportunity for Facebook, because users who believe they are communicating on a service free from surveillance are likely to reveal facts about themselves that they would not reveal had they known the content was being monitored," said the suit, filed this week with the U.S. district court for Northern California.

Facebook: Head of the social class
CNBC's Jon Fortt reports on the social network's growing popularity as a new study shows that 73 percent of online adults are now members of a social network.

Facebook said: "We believe the allegations are without merit and we will defend ourselves vigorously."

The case is the first in which the social network has had to defend itself against gathering data from private messages to target adverts to particular users, in an echo of lawsuits against Google for collecting data from its email service Gmail.

(Read more: Facebook pushes both ways on teen privacy)

Google was criticized in 2004 when it introduced Gmail adverts but a new case was brought last year. Google argued that the scanning of messages was automated, with no people reading the content.

Facebook has been criticized for its privacy policies in the past, battling with privacy advocates each time it revises its rules. Recently it was criticized for proposing changes which appeared to allow the routine use of users' names and images for advertising without their consent. Facebook said at the time the changes in its policies were purely linguistic.

More from the Financial Times:

Zuckerberg tops list of US philanthropists
Facebook introduces video adverts
Facebook makes new friends with S&P 500

The lawsuit is claiming the greater of either $100 a day for each day of alleged violation or $10,000, for each user claimed to be affected.

Shares in Facebook were flat on Thursday against a slight market decline.

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  • Matt Hunter is the senior technology editor at CNBC.com.

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