Facebook Inc (FB), Zynga Inc (ZNGA) defeat class-action lawsuits regarding wiretapping allegations

Posted May 12, 2014

Facebook Inc (NASDAQ:FB) and Zynga Inc (NASDAQ:ZNGA) have defeated class-action lawsuits that accuses the companies of civil wiretapping allegations connected to advertising practices. In a joint opinion filed last week on the two lawsuits, the Ninth US Circuit Court of Appeals ruled the advertising practices at issue did not involve wiretapping. The appeals court reinstated allegations that Facebook violated its terms of service for its users though.

The allegations accused Facebook and Zynga of using advertisements in games like Farmville were disclosed to advertisers without permission. However, this did not amount to wiretapping under the Electronic Communications Privacy Act (ECPA), which makes it illegal to disclose “contents” of a communication, according to the appeals court.

The federal appeals court’s decision is aligned with the US District Judge James Ware of California. In 2011, Judge Ware tossed the wiretapping allegations because the “referer” headers linked users and advertisers, but did not store or process any date.

Judge Sandra Ikuta said “the referer header information” that is at issue here includes only basic identification and address information rather than search terms or similar communication made by the user. Facebook said that the advertising practice at issue was stopped.

In 2011, Facebook made a settlement over privacy allegations with the FTC. The FTC will audit Facebook’s privacy practices for 20 years as part of the settlement.