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Furious Arguments in Facebook Privacy Case

OAKLAND, Calif. (CN) - In a case with major implications for privacy in Internet communications, a federal judge heard arguments from Facebook and a class who claim the social network illegally scans private messages for content it can use for targeted advertising.

No case has ever claimed Facebook users have property rights as far as their Facebook messages are concerned. Until now.

"That's what we're trying to do here," class attorney Michael Sobol told U.S. District Judge Phyllis Hamilton on Tuesday.

Sobol said his clients have an economic interest in their messages, and that Facebook profited from the control it exercised over the messages without senders' consent.

"There's no question here that these people were truly affected," Sobol said. "Personal control is being lost."

Facebook users Matthew Campbell and Michael Hurley sued Facebook in December 2013 for misrepresenting the privacy of their "private messages."

They claimed the social network scanned messages sent from one user to another, seeking URLs to third-party sites, then used that information to drive up the number of Facebook "likes" on third-party pages.

For instance, Facebook would intercept a user sending a news link to a friend through a private message, and would update the "like" count on that news site's page.

Facebook says it stopped the practice in October 2012, but the class claims it still scans private messages and there's no saying whether the company might use the data it gleans for other profitable purposes.

The class claims Facebook's data-use policy does not disclose the ways their information might be used, or that it intercepts and stores their private messages.

"How do you quantify economic harm?" Hamilton asked Sobol, skeptical about the class's unfair competition claim.

"I quantify it in diminished property interest," Sobol answered. "They're driving up an advertising machine. They're using 'Generation Like' to drive interest and generate advertising dollars."

The bigger questions have to do with privacy laws, such as the Wiretap Act, now known as the Electronic Communications Privacy Act of 1986, which enhanced privacy protections against access and disclosure of electronic communications.

Facebook attorney Joshua Jessen claimed the class doesn't have a claim under the act because of course Facebook receives and stores their messages. That's its ordinary course of business.

Also, all Facebook users consented to its Data Use Policy when they sign up for Facebook's free service, Jessen said.

Finally, for Facebook to have "intercepted" user messages, it would have had to acquire that communication during transmission of the message, not in storing the messages on its servers.

"It's storing content that users are sharing on the platform and that's the nature of the communication," Jessen said. He said that the plaintiffs are not challenging Facebook's having their messages, but objecting "to the specific use the messages are being put to."

"We're really not in a world where the Wiretap Act is applying here," Jessen said. "The Wiretap Act was enacted in order to combat criminal wiretapping. We're not in that universe. We're the provider of the electronic communication service. Of course we're getting the messages. They're being stored on Facebook servers. They're not challenging that we have the right to acquire these messages."

And even if they were, Jessen said, Facebook users have already consented as a matter of law.


Hamilton, who said she doesn't use Facebook, and kept calling the private messages on Facebook's platform "emails," picked apart its "ordinary course of business" argument.

Referring to the Data Use Policy, Hamilton said: "It doesn't say what use Facebook will make of that information we receive. So is the user to assume Facebook will do whatever it wishes with the information it receives?"

Jessen replied: "There's not that level of granularity, and we don't think it's required. There is a section on how we use the information we receive."

Hamilton said: "There is a difference between receipt and use by Facebook. Do you ever tell anyone in this set of rules how you're going to use the information you receive?"

Again, Jessen said, as a legal matter, consent to the purposes of the interception is not required.

"We're living in a world where these are really old statutes," Jessen said.

"Part of the problem here is these old statutes were intended to criminalize criminal wiretapping, not to cover routine business practices by social networking platforms."

Hamilton was not persuaded.

She said it seemed that Facebook was trying to have it both ways, denying it ever does anything with user messages while claiming it has a right to do just as it pleases, because of user consent.

"I'm just left with a very muddled sense of what the ordinary course of business," Hamilton said. "You're saying if plaintiffs' allegations are true, that's the ordinary course of business - but you're not willing to say that's what Facebook was doing."

Jessen tried to clarify. "Even if the court credited those allegations, that still would be Facebook's ordinary course of business. So either way that would be fatal to the Wiretap Act claim."

Hamilton said that could lead Facebook "to essentially adopt any practice, and if it becomes regular routine, have that determined to be regular course of business."

The judge asked: "Even if that's AT&T listening in on users' phone conversations to see what random tennis shoes they're talking about - if they start doing that on a regular basis, wouldn't that be under your definition of regular course of business?"

Jessen said there are limits, but that unlike phone calls where data is received in transmission, the Wiretap Act when amended in 1986 distinguished electronically stored communications.

Hamilton said: "We have in this district two different views on the ordinary course of business and I'm probably going to end up somewhere in the middle of those two." Hamilton was referring to two recent opinions by fellow jurists Lucy Koh and Paul Grewal, both in San Jose.

In In re Google Inc. Gmail Litig., Koh found Google's interception of emails fell outside the scope of its ordinary course of business.

But U.S. District Judge Alex Grewal took a different position in an earlier order in the case, holding that Google was immune as a provider of electronic communications under the statute, and exempt from the Wiretap Act's definition of interception.

Sobol, however, likened Facebook's scanning of private messages to "the mailman taking the letter, opening it, reading it, deriving its meaning and doing something with it."

Sobol said that if the court allows Facebook to hide behind its nonspecific data use policy, there's nothing to stop the company from doing whatever it pleases with information it misleads users into believing to be private.

"They're not stopping with 'likes.' They're looking for permission to read everything, because, hey, that's our normal course of business. They may say they're not doing it, but that's where the legal declaration takes us. And that's why this is an extremely important case," Sobol said.

Sobol said that decades-old wiretapping laws are still relevant in a digital world. "We have a statute that is old but it embodies time-honored legal principles and it protects people from intrusion. In this new world of electronic communications, acquiring content becomes all the more important, varied and dangerous. And we need to draw the line."

Jessen retorted: "There's all of this hand waiving about where we draw the line. Congress must draw the line if there needs to be a line."

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