Class Action Lawsuit Against App Developers Accuses Them of Stealing Personal Data

by Mike Mintz on March 27, 2012 · 0 comments

in Legal Technology

A class action lawsuit was recently filed in Texas in the Western Division of the U.S. District Court, Austin Division against some of the biggest heavy-weights in the tech industry.  In the lawsuit plaintiffs allege that makers of popular mobile apps misappropriate millions of  users’ personal information such as names, e-mail addresses and phone numbers without the users’ consent or even knowledge.

Amongst the eighteen companies being sued are Apple, Facebook, Twitter, Electronic Arts, Gowalla, Foursquare, LinkedIn, Hipster, Path, and Yelp. Apple was named as a defendant because it helped transfer the personal information from the users to the apps.  More companies are expected to be added to the lawsuit.

The plaintiffs’ lawyers could not have timed the filing of the lawsuit any better. The suit was commenced in the middle of SXSW, an event that brings over 20,000 tech industry types to Austin. Amongst the SXSW attendees are employees of the defendants, and of course, the kinds of people who use these apps.

According to the lawsuit, approximately twenty apps violate privacy policies implemented by distributors such as Amazon’s App Store, Apple’s App Store and Google Play. The privacy policies are also being violated by the popular online games “Angry Birds” and “Cut the Rope”.

The class action lawsuit is seeking monetary damages as well as an injunction preventing tech firms from collecting the personal information without first obtaining the permission of its users.

The defendants Apple, Facebook and Electronic Arts all maintain offices in the Austin area.  Gowalla used to maintain its headquarters in Austin.

The lawsuit alleges that this personal information is quite valuable. Selling such personal information pays anywhere from sixty cents to several dollars per personal contact.  To date, it has not been established that the personal data is being used for anything other than implementing the apps. However, the possibility for the commercial exploitation of the personal information is real.

The potential for abuse is immense.  Facebook has over 800 million users. Each of these users is connected to at least a score of friends. Some Facebook users count Facebook friends in the hundreds and even thousands.  Twitter is no slouch either. It has 500 million accounts, although not all of them are actively used.

The causes of action alleged in the lawsuit include garden variety common law tort claims as well as causes of action more specific to the technology age. The claims include, among others: invasion of privacy, intentional interception, disclosure or use of electronic and wire communication, breach of computer security, negligence, and unjust enrichment.

The case is scheduled to go to trial in 2013.

The lawsuit comes on the heels of a New York Times article which revealed that the address books on smartphones are particularly vulnerable to use by app developers who access the personal information contained in the address book without the users’ knowledge.

Apple, probably the largest provider of apps, had 25 billion apps downloaded in March 2012.  Google is no slouch either with 10 billion Android apps having been downloaded as of three months ago.

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