As online privacy concerns grow, companies using web trackers face increasing legal scrutiny. Several recent lawsuits have challenged the legality of web trackers, arguing they violate decades-old privacy laws that predate the internet. These cases raise fundamental questions about whether traditional privacy statutes apply to digital tracking technologies. The implications of these rulings could significantly impact website owners, advertisers, and tech companies relying on data collection.
This TechyNerd article explores recent federal and state court decisions on whether web trackers violate privacy statutes like the California Invasion of Privacy Act (CIPA) and the Video Privacy Protection Act (VPPA). We also discuss best practices for compliance and risk mitigation.
Web Trackers and Privacy Law: A Legal Battleground
Web trackers, particularly third-party cookies and pixels, collect user data and transmit it to third parties, often for advertising purposes. While these technologies have become standard in online business, they may also violate longstanding privacy laws.
Three recent court cases highlight how privacy statutes written before the internet are being interpreted in the digital age:
- Martinez v. D2C, LLC – Focused on Facebook Pixel’s use and its potential violation of the VPPA.
- Shah v. Fandom – Considered whether web trackers qualify as “pen registers” under CIPA.
- Gabrielli v. Insider Inc. – Examined whether sharing IP addresses with third parties constitutes a privacy violation.
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Case Study: The Facebook Pixel and the Video Privacy Protection Act
The Martinez v. D2C, LLC lawsuit centered on Univision NOW’s use of Facebook’s Pixel, which tracks user activity. Plaintiffs alleged that Univision transmitted users’ video-watching history to Facebook without consent, violating the Video Privacy Protection Act (VPPA).
The VPPA, enacted in 1988, was originally designed to protect video rental records. The plaintiffs argued that, although the law predates the internet, it still applies to modern digital tracking.
The defendants countered that:
- The Facebook Pixel only transmits data when users have Facebook open in the same browser.
- Many users block tracking cookies through privacy settings.
- Simple mathematical assumptions were insufficient to establish a large class of affected users.
The court agreed with the defendants, stating that assumptions alone cannot prove numerosity in class action cases. It even questioned whether the three named plaintiffs qualified as class members. This ruling highlights the challenge of proving that web trackers violate VPPA in a class action lawsuit.
Web Trackers as “Pen Registers” Under California Law
A Broad Interpretation: Shah v. Fandom
The Shah v. Fandom case focused on California’s Invasion of Privacy Act (CIPA), a 1967 law prohibiting unauthorized eavesdropping and the use of “pen registers”—devices that record dialing and routing information.
The plaintiffs claimed Fandom’s web trackers acted as pen registers by capturing users’ IP addresses and transmitting them to advertisers without consent. The court ruled that web trackers qualify as pen registers under CIPA, emphasizing that California courts interpret older laws to apply to new technologies. The decision raised concerns that many standard website functions could be criminalized under this broad reading of the statute.
The defendant, Fandom, failed to show that users had given consent, making their tracking activities potentially illegal under CIPA. This ruling sets a precedent that could lead to further lawsuits against website owners using tracking technologies.
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A Narrow Interpretation: Gabrielli v. Insider Inc.
In contrast, the Gabrielli v. Insider Inc. ruling took a more restrictive view. The plaintiff argued that using cookies to transmit IP addresses to third parties violated CIPA. However, the court ruled that:
- Website users do not have a reasonable expectation of privacy in their IP addresses.
- The plaintiff suffered no concrete injury.
- Federal courts lack jurisdiction over claims where no actual harm is demonstrated.
This decision suggests that merely sharing IP addresses may not be enough to establish a privacy violation under CIPA, providing some relief for website owners.
State Court Decisions: Inconsistent Rulings
California state courts have issued mixed decisions on whether web trackers qualify as pen registers:
- Licea v. Hickory Farms – Dismissed a complaint, ruling that sharing IP addresses alone is not a CIPA violation.
- Levings v. Choice Hotels International – Found that certain tracking devices do qualify as pen registers.
The inconsistency in these rulings means website owners must remain cautious and proactive in compliance efforts.
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Best Practices for Compliance and Risk Mitigation
Given the legal uncertainty, businesses using web trackers should implement safeguards to reduce the risk of litigation. Key strategies include:
- Clear Consent Mechanisms – Websites should provide explicit, informed consent options for users.
- Limit Data Collection – Reduce the amount of personally identifiable information collected.
- Transparency in Tracking – Inform users about what data is being collected and how it is used.
- Adopt Industry Best Practices – Follow evolving legal standards and industry guidelines.
- Use Privacy-Focused Technologies – Consider alternatives to third-party cookies, such as first-party data collection.
By taking these precautions, businesses can minimize legal risks while maintaining effective digital marketing practices.
Conclusion
The legal landscape surrounding web trackers remains uncertain, with courts offering conflicting rulings. While some decisions favor strict privacy protections, others suggest limited harm from IP tracking. Businesses must proactively implement compliance measures to navigate these legal risks and maintain consumer trust in an increasingly privacy-conscious digital world.
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FAQs
- What are web trackers?
- Web trackers are scripts or cookies that collect user data and send it to third parties for analysis or advertising.
- Why are web trackers facing legal scrutiny?
- They may violate privacy laws written before the internet, such as the Video Privacy Protection Act and California’s Invasion of Privacy Act.
- What is the Video Privacy Protection Act (VPPA)?
- A 1988 law protecting consumers’ video rental records, now being applied to online video tracking.
- What is the California Invasion of Privacy Act (CIPA)?
- A 1967 law restricting eavesdropping and pen register use, now used to challenge web trackers.
- Are web trackers considered “pen registers”?
- Some courts have ruled that they are, while others have rejected this interpretation.
- Do websites need user consent to use trackers?
- Yes, best practices recommend obtaining explicit user consent to avoid legal risks.
- Can IP address tracking violate privacy laws?
- Some courts say no, arguing that users have no expectation of privacy in their IP addresses.
- What happened in Martinez v. D2C, LLC?
- Plaintiffs alleged Univision’s Facebook Pixel use violated VPPA, but the court found insufficient evidence.
- What is the best way for websites to ensure compliance?
- Implement clear consent mechanisms, limit data collection, and follow industry best practices.
- What is the future of web tracker litigation?
- Legal interpretations vary, so businesses should stay updated on evolving regulations and court rulings.