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Top European Court to Decide on Facebook Class Action Suit

Jack Duffy | FlashRatings | Tuesday, September 13, 2016 7:59 PM EDT
The European Court of Justice, the EU’s top court, will decide on whether an Austrian privacy activist can bring a class-action lawsuit against Facebook (FB) over its privacy policies.

The case, which was launched the Austrian student-turned-activist Max Schrems in 2014, was referred by the Austrian Supreme Court to the European Court on Monday.

Schrems is claiming 500 euros in damages for each of the more than 25,000 signatories to his lawsuit, accusing Facebook of having invalid privacy policies and of processing users’ data illegally.

Facebook has been seeking to have the case dismissed on procedural grounds, saying in a statement on Monday that “Mr. Schrems’s claims have twice been rejected on the grounds that they cannot proceed as a ‘class action’ on behalf of other consumers in Austrian courts.” 

Schrems has had success at the ECJ in the past. Following a complaint last year, the court struck down a crucial data transfer deal that allowed companies like Facebook and Amazon to transfer personal data easily from the EU to the U.S., saying that the data of EU citizens was not properly protected.

Analysts have shown little reaction to the ongoing court drama, with no analyst firms issuing updates in response to Monday’s referral to the European Court.

Overall, five analysts have issued updates on FB in the last 30 days, 100% of them positive with a medium price target of $160, which marks a 26% upside to the current stock price.