A class action lawsuit has been filed against Facebook seeking $15 billion in damages, or $10,000 per member, for violating the privacy of its members.
The action filed in federal district court in California combines 21 cases filed across the United States and alleges the social network violated its members' privacy rights by tracking them even after they logged out of their Facebook accounts.
Facebook's Andrew Noyes, manager of public policy communications, said: "We believe this complaint is without merit and we will fight it vigorously."
The lawsuit was filed on 18 May as Facebook launched an Initial Public Offering (IPO) of stock expected to raise some $16 billion for the company, which has a market capitalisation of some $100 billion.
"This is not just a damages action, but a groundbreaking digital-privacy rights case that could have wide and significant legal and business implications," Bloomberg news was told by one of the attorneys in the case, David Straite, a partner with the US branch of Stewarts Law. Stewarts is the largest litigator in the United Kingdom and just opened offices in the United States last month.
According to the lawsuit, Facebook violated the US Wiretap Act by tracking its members movement on the web through "like" buttons embedded on millions of web pages throughout the internet.
The law bars "interception and disclosure of wire, oral or electronic communications" and provides fines of $100 a day, up to $10,000, for every day the law is violated. If the maximum fine were imposed on Facebook, each of the company's 800 million members would receive $10,000.
All the lawsuits were consolidated by a California judicial panel that decided the cases should be heard in Facebook's home state, according to Mashable.
The class action suit is the result of a decision made by a California judicial panel, which decided the multiple lawsuits should be unified and heard in Facebook's home state.
While limited to the United States for now, Stewarts is reportedly looking for ways to expand the case internationally.
Late last year, Facebook entered in a privacy agreement with the US Federal Trade Commission to settle a case in which the agency accused the social network of engaging in deceptive privacy policies that caused users to share more information than intended.
Under that agreement, Facebook is subject to fines of $16,000 per violation per day for violating the settlement terms.