British Facebook users may be handed £50 each after landmark legal action

Facebook parent company Meta has been ordered by the UK competition watchdog to sell the gif creation website Giphy.

Mark Zuckerberg could be forced to pay most British Facebook users about £50 each if a landmark legal action alleging that the site abused its market position succeeds.

Liza Lovdahl Gormsen, a competition law academic, will file legal proceedings today against Meta, the social media site’s parent company on behalf of 44 million users of Facebook between 2015 and 2019.

Lawyers for Gormsen, a senior research fellow at the British Institute of International and Comparative Law, will tell a court that Facebook should pay at least £2.3 billion in damages for allegedly having made billions “by only permitting access to its network in exchange for control of its users’ extensive personal data”.

The claim, which has been filed with the Competition Appeal Tribunal, is said to be the first time that one of the Silicon Valley technology giants will face a legal claim that it abused its market dominance by imposing unfair terms and conditions on UK users to exploit personal data. In August the tribunal permitted the first US-style competition class action to be heard: a £14 billion claim that Mastercard forced shoppers to pay higher prices through fees it charged merchants in the 16 years to 2008.

Gormsen argues that Facebook, which Zuckerberg, 37, co-founded 17 years ago, set an “unfair price” for its users in Britain. It claims that the “price” set for granting access to the social network was the surrender of UK users’ “highly valuable” personal data on a “take-it-or-leave-it basis”.

It will be argued that although users received “free” access to Facebook, they received no “monetary recompense” while “Facebook generated billions in revenues”. According to the claim, “this unfair deal was only possible due to Facebook’s market dominance”.

Gormsen’s class action is being brought on an “opt-out basis”, meaning that 44 million UK Facebook users will be eligible for compensation unless they actively drop out of the litigation.

The claim is being brought under the Consumer Act 2015, which allowed US-style class actions in the UK for the first time, and will seek financial redress for Britons affected by Facebook’s alleged abuse of its market position between October 1, 2015, and December 31, 2019. Gormsen’s lawyers define those affected as “all people domiciled in the UK who used Facebook at least once during this period”. There was “a dark side to Facebook”, Gormsen said yesterday.

A spokesman for Meta said: “People access our service for free. They choose our services because we deliver value for them and they have meaningful control of what information they share on Meta’s platforms and who with. We have invested heavily to create tools that allow them to do so.”