"Google, Meta, H&R Block Face Lawsuit Over Privacy and Tracking Pixels", 9 October 2023

Data privacy lawsuits are not new. Companies are frequently facing legal challenges regarding their collection and use of consumer data, but absent a unifying federal law, many lawsuits are taking creative approaches.

The Racketeer Influenced and Corrupt Organizations (RICO) Act, passed in 1970, was not written with data privacy in mind. But it is being used as the basis for a new class action lawsuit against Google, Meta, and H&R Block.

The Class Action Lawsuit

The case hinges on the use of tracking pixels, code snippets embedded in websites to monitor user behavior. A July 2023 congressional report details how tax preparation companies including H&R Block, TaxAct, and TaxSlayer share taxpayer data with Google and Meta.

The report finds that the tax prep companies shared the data of millions of taxpayers with Meta, Google, and other large tech companies. It reports that the data was used for advertising purposes, and the companies in question were reckless in their treatment and sharing of taxpayer data.

The class action lawsuit, filed by law firm Wisner Baum, alleges that the three companies colluded on the illegal collection, interception, and transmission of sensitive personal and financial tax return information (TRI).

“Defendants’ deceptive and misleading scheme was calculated to extract valuable TRI from unwitting taxpayers on a massive scale. This TRI was, in turn, used to improve Defendants’ targeted advertising operations, a revenue-generator for all defendants,” according to the complaint.

The RICO Act was established to provide “enhanced sanctions and new remedies for dealing with the unlawful activities of those engaged in organized crime,” according to the US Department of Justice.

The class action lawsuit alleges that defendants violated the RICO act by engaging in “false, misleading and deceptive marketing and a racketeering conspiracy.”

Google spokesperson José Castañeda shares in an emailed statement: “We have strict policies and technical features that prohibit Google Analytics customers from collecting data that could be used to identify an individual. Site owners -- not Google -- are in control of what information they collect and must inform their users of how it will be used..”

Meta did not respond to InformationWeek’s request for comment, and H&R Block declined to comment on pending litigation.

Old Laws, New Lawsuits

While challenging three companies’ use of tracking pixels under the RICO Act may be a novel legal approach, it is part of a larger trend, according to Justin Daniels, equity partner at law firm Baker Donelson and faculty member at IANS Research.

Plaintiffs are looking to other older legislation like the Video Privacy Protection Act (VPPA) to seek legal recourse for alleged data privacy violations in the modern era.

Modern lawsuits are arguing that companies using tracking pixels on their websites are violating this law through the disclosure of personally identifiable information as defined by the VPPA. The National Law Review describes this dismissal of claims made under the VPPA as “a mixed bag thus far.”

The filing of the class action lawsuit against Google, Meta, and H&R Block is just the first step in a long legal process. But more privacy lawsuits could leverage the RICO Act if these plaintiffs secure a victory.

The proliferation of data privacy lawsuits, and the multitude of approaches they leverage, is unlikely to slow in the coming years.

Tracking Pixels in the Spotlight

Tracking pixels continue to be a hot button data privacy issue. These tools have come under scrutiny in the health care field, which is answerable to the Health Insurance Portability and Accountability Act (HIPAA), and other industries.

The use of tracking pixels is widespread, and lawsuits are likely to continue challenging those using them.