In a development highlighting the recent wave of litigation around tracking technologies, live event streaming platform FloSports Inc. has agreed to a $2.6 million class action settlement to resolve claims related to its alleged use of the “Meta Pixel.” The Meta Pixel (or “Facebook Pixel”) “is a piece of code” on a company’s website that helps them understand “the actions people take on [their] site, like visiting a page or adding an item to their cart.” The Meta Pixel also allows companies to “see when customers took an action after seeing [their] ad on Facebook and Instagram[.]”

FloSports joins the ranks of hundreds of other companies across various industries that have recently faced lawsuits alleging violations of the Federal Wiretap Act, Video Privacy Protection Act (VPPA), Health Insurance Portability and Accountability Act (HIPAA), and state wiretapping laws in connection with their use of the Meta Pixel and similar tracking technologies. In these disputes, plaintiffs claim that by using such tracking technologies, website operators share users’ private information with third parties without their consent. Here, the plaintiffs claimed that when users watch a video on FloSports’ website, the Meta Pixel communicates to Meta the title of the video, its URL, and the viewer’s Facebook ID (which can be used to view and access their Facebook profile), which constitutes a violation of the VPPA. The plaintiffs sought $2,500 per violation of the VPPA in addition to attorneys’ fees and expenses.

According to an unopposed motion for preliminary approval of the class action settlement, FloSports revealed information during mediation proceedings that suggested it could not satisfy an adverse judgment and that “a verdict in favor of the class in the full amount of claimed damages likely would force the company into bankruptcy.” Pursuant to the settlement agreement, FloSports will be required to limit its use of the Meta Pixel on its websites to comply with the VPPA in addition to making the $2.6 million payment.

Key Takeaways:

• This case demonstrates that deploying tracking technologies on a website carries inherent risk of litigation claims. While the Meta Pixel is widely used across the internet, plaintiff's attorneys are targeting companies for quick pay days for alleged violations of privacy laws.
• While this lawsuit resulted in a settlement, we believe these claims likely would have failed at trial. However, most companies are afraid to risk an unfavorable judgment, and therefore decide to settle such claims.
• Due diligence is key. Companies must regularly review their data privacy policies and practices, especially as they relate to tracking technologies. Be careful when rolling out tracking technologies that are more intrusive, such as those that capture key strokes or record screens.

Our team is very familiar with these types of cases. Please contact us if you need any help.