The Rise of Class Action Lawsuits in the Digital Age

Technology plays a pivotal role in our daily lives, transforming the way we interact, communicate, and conduct business. Individuals and businesses alike have relied on technological advancements to make life easier and simpler. However, this increased reliance on technology and the growing presence of online platforms have led to a surge in class action lawsuits related to data privacy, consumer protection, and digital rights.

Explore the impact of technology on the rise of class action lawsuits and learn how digital platforms mitigate risks to avoid class action lawsuits in this article.

Technology is undeniably a significant help in our everyday lives. In the legal landscape, it has streamlined the litigation process, aiding lawyers in various ways. However, technology also acts as a double-edged sword in class action litigation—it facilitates the easy collection of class members while contributing to the rise of class action lawsuits.

How Technology Increased Class Action Lawsuits

• Data Collection and Storage

The widespread use of digital platforms and services has resulted in data collection practices by various businesses. This data collection can include fingerprint scans, facial recognition, biometrics, or data location of consumers.

Class action lawsuits often arise when there are violations of privacy laws, such as the Illinois Biometric Privacy Act (BIPA), the California Consumer Privacy Act (CCPA), and the California Privacy Rights Act (CPRA). These lawsuits are prevalent if consumers report that their private data and biometrics were collected without their consent, even after opting out of the data collection services.

• Data and Privacy Concerns

Businesses often use technology to collect information when users visit their websites. These data serve as a tool for companies to enhance user experiences as well as for advertising purposes. However, this activity heightened privacy concerns among users, as storing sensitive information could lead to the improper use or disclosure of customers’ personal or biometric data.

• Cyberattack and Data Breach

Personal data collected by businesses, whether with user consent or not, is typically stored in the cloud or within the company’s systems and databases. A single ransomware attack on this data storage can lead to a leak of sensitive information, potentially resulting in identity theft. Consequently, there are several class action lawsuits related to data breaches, as affected individuals seek compensation for the mishandling and failure to protect their personal information.

• Chatbots

Businesses use chatbots to interact with customers regarding their queries. This approach allows for faster resolution of customer issues, as chatbots provide instant responses and assistance 24/7 through their live chat feature, reducing wait times and enhancing overall customer satisfaction.

Despite being helpful, plaintiffs claim that chatbots violate web users’ privacy, as companies allow third-party chat software providers to monitor and access private conversations between customers and chatbots. During these chats, users may inadvertently provide confidential information that the chatbots request to resolve their issues.

• Session Replay Technology

Session replay technology is a tool businesses use to record a person’s interactions with a website or mobile application. It tracks mouse movements, clicks, keystrokes, and text entered in entry fields. Businesses use session replay tools to monitor user activity on their websites. For companies selling products, this technology provides insights into users’ product preferences.

Although it might seem harmless as it only tracks activities, plaintiffs claim that these tools monitor their actions without consent and may unintentionally capture private information, such as medical and financial records.

Strategies to Mitigate Risks and Avoid Class Action Lawsuits:

• Ensure adherence to all laws and regulations regarding biometrics and privacy.
• Develop and maintain clear policies and procedures for data collection, storage, and use.
• Always obtain consent from individuals before collecting, storing, or using any data.
• Collect, store, and use only the data that is necessary.
• Set limits on data storage time and remove data from the system when it is no longer needed.
• Implement strong security measures to protect sensitive data during storage.
• Examine all tracking technologies and ensure that any data collected is not shared with third parties without consent.
• Consider launching a pop-up banner that allows users to opt in or out of tracking technology.

As technology continues to advance and digital platforms become more integral to our daily lives, protecting user privacy and adhering to data protection laws have never been more critical. The rise of class action lawsuits in the digital age underscores the urgent need for businesses to prioritize data privacy and security. By understanding and complying with relevant laws, implementing robust data protection measures, and maintaining transparent communication with users, companies can mitigate risks and avoid costly legal battles.

Delve into the latest developments in class action litigation and learn essential best practices at our webcast: Class Action Litigation: A Comprehensive Guide to Recent Developments and Best Practices