CONSUMER PROTECTION IN THE NEW ECONOMY:..., 73 Consumer Fin. L.Q....
© 2019 Thomson Reuters. No claim to original U.S. Government Works. 1
73 Consumer Fin. L.Q. Rep. 6
Consumer Finance Law Quarterly Report
2019
J.H. Jennifer Lee a1 Kimberly B. Frumkin a2 Susan Tran a3 Nicolás Sánchez-Mandery a4
Copyright © 2019 by Conference on Consumer Finance Law; J.H. Jennifer Lee, Kimberly B. Frumkin, Susan Tran, Nicolás
Sánchez-Mandery
CONSUMER PROTECTION IN THE NEW ECONOMY: PRIVACY CASES IN
E-COMMERCE TRANSACTIONS OR SOCIAL MEDIA ACTIVITIES
I. INTRODUCTION
This article examines litigation trends related to Internet commerce and consumer protection arising in the context of privacy.
We focus on the evolution of legal standards, as manifest in judicial decisions nationwide. Internet-based commerce is
ubiquitous, and it is reasonable to expect that as “Big Data” and the use of consumers' information becomes more pervasive,
*7 public policy concerns, pioneering technologies, and customer expectations may conflict. This issue impacts several
industries nationwide, including data aggregators, retailers, financial services firms, social media platforms, and manufacturers
of consumer goods (smart TVs, etc.). Assessing past litigation and other legal trends in this space--which we discuss herein--can
permit businesses to be better prepared for the future and regulators to develop new privacy rules (including the new California
privacy law enacted June 2018) in a manner that is rational within a larger context. In addition, a deep dive into the legal
precedents decided, to date, helps to inform policymaking by elected officials and state or federal legislators.
We begin our discussion by framing the question. On the one hand, the proliferation of Internet technology has improved the
speed, convenience, and ability of consumers to locate, compare, and buy products and services online. On the other hand, many
of these conveniences often come with tracking, storing, and sharing of what some consumers view as their private information,
including for example, content viewing history. In these instances during which a consumer believes she has been aggrieved
by corporate conduct as relating to her individual privacy rights, conventional wisdom suggests that such a consumer could
vindicate her rights in court. Can she?
It depends. As courts have grappled with applying existing litigation procedures and substantive privacy standards to new
technology, we have identified four major categories where privacy concerns have arisen within the consumer-protection
framework: 1) a specific trend of legal cases targeting companies with an Internet presence in the absence of any data breach that
consumers have brought thus far in court; 2) whether the injury-in-fact requirement poses an obstacle to plaintiffs establishing
claims; 3) the ability to prevail when data-security services were not part of the bargain at hand; and 4) the monetary value of
one's personal data. In addition, it is illuminating to consider 5) social science research on whether consumers even care about
privacy. Each of the foregoing items is explained in further detail below. We conclude that because of procedural complexities in
litigation and the ad-hoc, case-by-case approach taken by courts, privacy is an area that is ripe for additional claims as plaintiffs
become increasingly well-versed in data and consumer rights, aided by new privacy laws coming into effect in future years.
II. PLAINTIFFS TARGET SOCIAL MEDIA COMPANIES, RETAILERS, OR CONSUMER-FACING
BUSINESSES, EVEN IN THE ABSENCE OF A DATA BREACH
While much public attention recently has been focused on data-protection issues in the context of a data breach or malicious
hacks, a more provocative fact pattern--for purposes of assessing substantive “consumer rights” in the new economy--arises in
