The prevalence of online advertising, the rise of websites that collect personal information (like social networking sites), and the enactment of several federal statutes protecting online users have resulted in more and more lawsuits claiming breaches of privacy. Many of these lawsuits have conglomerated into class action suits, which are more likely to be litigated due to their efficiency and potential for greater damages. It is important for websites that collect information to be aware of this trend, and understand steps that can be taken to protect themselves.
One of the biggest issues facing websites is simply the threat of a lawsuit. For most website operators, the cost of litigation, combined with the potential hit to their public perception, is enough to convince them to quickly settle claims for breach of privacy. But a website with a history of settlement is a prime target for easy money for users and plaintiff’s attorneys.
Firstly, plaintiffs have a tough time succeeding in their breach of privacy claims. For instance, proving actual damages is difficult, particularly when there is no monetary loss claimed. And while most claims arise under federal statutes that provide damages for plaintiffs, many plaintiffs do not have standing under these statutes because much of the private information at issue in many online privacy cases is not protected. Further, threats of class action suits should be met with skepticism due to the practical difficulties of finding similarly situated plaintiffs—many times different potential plaintiffs have varying consent, causation, reliance, and injury claims and are thus unable to bring a suit as a class.