Is This Lawsuit Haunting Facebook Shares?

Friday may have been Facebook’s (NASDAQ:FB) big day in the market, but a party-pooper lawsuit filed on Friday is accusing the social network of invading user privacy and is seeking $15 billion in damages. The suit accuses Facebook of improperly tracking users even after they logged out of their accounts.

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The lawsuit, filed in the Federal Court in San Jose, California, combines 21 court cases from across the country into one class-action case. A way to add non-U.S. residents to the suit is also being evaluated.

“This is not just a damages action, but a groundbreaking digital-privacy rights case that could have wide and significant legal and business implications,” David Straite from Stewarts Law, one of the firms leading the claim, wrote in an e-mailed statement to Bloomberg.

The U.S. Wiretap Act “provides statutory damages of the greater of $100 per violation per day, up to $10,000, per Facebook user,” according to the lawsuit. The plaintiffs are therefore “each entitled to the greater of $100 of statutory damages per day, or $10,000 each for the ongoing violations” or $15 billion for all of Facebook’s more than 800 million members.

Facebook (NASDAQ:FB), which has repeatedly been scrutinized by regulators over user privacy, sold 421.2 million shares at $38 each to raise $16 billion in its initial public offering on Thursday, valuing the company at $104.2 billion then. In Monday morning trading, shares of Facebook are trading lower over 13% at $33.14 per share, or a $90.8 billion market cap.

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