Student group to sue Facebook over privacy policy

An Austrian student group plans to sue Facebook Inc, the world's biggest social network, for failing to do enough to protect the privacy of its hundreds of millions of members.

Privacy campaign group europe-v-facebook, which has been lobbying for better data protection by Facebook for over a year, said on Tuesday it planned to sue the US company in Ireland, where it has its international headquarters.

The move is one of a number of campaigns against the giants of the internet, which are under pressure from investors to generate more revenue from their huge user bases but which also face criticism for storing and sharing personal information.

Internet search engine Google, for example, has been told by the European Union to make changes to its new privacy policy, which pools data collected on individual users across its services including YouTube, gmail and social network Google+, and from which users cannot opt out.

Europe-v-facebook has won some concessions from Facebook, notably pushing it to switch off its facial recognition feature in Europe.

But the group said on Tuesday the changes did not go far enough and it was disappointed with the response of the Irish Data Protection Commissioner, which had carried out an audit after the campaign group filed numerous complaints.

"The Irish obviously have no great political interest in going up against these companies because they're so dependent on the jobs they create," europe-v-facebook founder Max Schrems told Reuters.

Gary Davies, Ireland's deputy data protection commissioner, denied Facebook's investment in Ireland had influenced regulation of the company.

"We have handled this in a highly professional and focused way and we have brought about huge changes in the way Facebook handles personal data," he told Reuters.

Facebook did not immediately respond to a request for comment. It is due to hold a conference call later on Tuesday to answer customer concerns about its privacy policy, which will include representatives from Facebook Ireland.

LOSING PATIENCE

Schrems, who has filed 22 complaints with the Irish regulator, said more than 40,000 Facebook users who had requested a copy of the data Facebook was holding on them had not received anything several months after making a request.

The law student also questioned why Facebook had only switched off facial recognition for users in the European Union, even though Ireland is the headquarters for all of Facebook's users outside the United States and Canada.

Facebook is under pressure to reverse a trend of slowing revenue growth by selling more valuable advertising, which requires better profiling of its users.

Investors are losing patience with the social network, whose shares have dropped 40 percent in value since the company's record-breaking $104 billion initial public offering in May.

Last month, Facebook proposed to combine its user data with that of its recently acquired photo-sharing service Instagram, loosen restrictions on emails between its members and share data with other businesses and affiliates that it owns.

Facebook is also facing a class-action lawsuit in the United States, where it is charged with violating privacy rights by publicising users' "likes" without giving them a way to opt out.

A US judge late on Monday gave his preliminary approval to a second attempt to settle the case by paying users up to $10 each out of a settlement fund of $20 million.

Ireland also hosts the European headquarters of other high-tech firms including Microsoft and Google thanks to generous tax breaks.

Europe-v-facebook said it believed its Irish lawsuit had the potential to become a test case for data protection law and had a good chance of landing up in the European Court of Justice.

Schrems said the case could cost the group around 100,000 euros, which it hoped to raise via crowd-funding - money provided by a collection of individuals - on the Internet.

Copyright @ Thomson Reuters 2012