Changing the privacy game: Class action lawsuits

The decision of the Austrian Supreme Court on 12 September 2016 to refer the class action suit brought against Facebook by Privacy advocate Max Schrems to the European Court of Justice will have widespread consequences for both companies and consumers in Europe.

Class actions on privacy-related matters represent a game changer for both consumers and businesses and the world will be watching the CJEU with attentive eyes on this case.

Class actions, however, are already provided for by Regulation 2016/679 so it’s really just a matter of time before this judicial mean is widely available to consumers. Traditionally, privacy-related damages were difficult to quantify, they were rather small, not worth being pursued by single consumers in expensive judicial cases. With the class action, however, damages can be aggregated and consumers interests can be collectively represented, quickly reaching a critical mass that vastly justifies legal costs.

The class action will most likely lead to an escalation of privacy-related litigation in the next future and will force companies to allocate an extra budget for privacy-related litigation and possible compensation for damages. Companies may also consider putting less aggressive consumer-data processing activities in place in order to mitigate the legal risks.

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