A law normally used to prosecute organized crime is being invoked to go after Facebook’s parent Meta, Google, and H&R Block for allegedly sharing and mining users' tax information.
Law firm Wisner Baum has filed a RICO class-action lawsuit against the tech giants for allegedly “colluding” with H&R Block to profit off the taxpayer information. The lawsuit is based on a Congressional report from July that said tax prep companies, including H&R Block, had used advertising and analytics tools from Meta and Google to collect and then share users' tax information to the tech companies.
"Although the tax prep companies and Big Tech firms claimed that all shared data was anonymous, the FTC and experts have indicated that the data could easily be used to identify individuals, or to create a dossier on them that could be used for targeted advertising or other purposes,” according to the report authors.
Since that report came out, others have also filed class-action lawsuits targeting H&R Block. But Wisner Baum decided to expand the legal action by invoking RICO, which is usually used to prosecute multiple individuals in a criminal enterprise, such as Mafia organizations.
In this case, lawyers from Wisner Baum claim Google and Meta worked with H&R Block to use taxpayer information “without consent to maximize profits through direct-to-consumer advertising.”
“Meta and Google allegedly used this data to better understand consumer behaviors, measure the performance of ad campaigns, and directly target consumers with additional advertising, all for the ultimate purpose of monetizing the data,” Wisner Baum says.
The challenge will be proving collusion between the companies and H&R Block. For now, Wisner Baum argues Meta and Google engaged in malpractice by misleading the public about their privacy practices while failing to enforce them.
Meta and H&R Block didn’t immediately respond to a request for comment. However, Google is dismissing the allegations in the lawsuit as false. “We have strict policies and technical features that prohibit Google Analytics customers from collecting data that could be used to identify an individual,” a company spokesperson says. “Site owners —not Google— are in control of what information they collect and must inform their users of how it will be used. Additionally, Google has strict policies against advertising to people based on sensitive information.”
In the meantime, the US Federal Trade Commission warned this month that the major tax prep companies could face civil penalties if they disclose users’ confidential data without obtaining consent. The US senators behind the Congressional report have also forwarded their findings to the IRS and the Justice Department, urging action.