Week 6 IRAC FINAL

Topics: Facebook, U.S. Securities and Exchange Commission, Plaintiff Pages: 10 (1976 words) Published: May 31, 2015


WEEK 6 IRAC Brief
Law/531
November 17, 2014

Explanation
This paper will explain regulatory compliance requirements for business situations for both domestic and international businesses. It will also evaluate legal risks associated with domestic and international business activity and explain how this can be applied in a business managerial setting. The two cases chosen deal with Facebook and suits that have happened domestically and internationally to show and explain the difference between international and domestic laws. Case 1: International

Max Schrems a law student and Austrian citizen launched a class action lawsuit against Facebooks Ireland Headquarters, alleging that Facebook violated the European data protection law and knowingly participated in the NSA Prisim program. Case

On July 31, 2014 Max Schrems filed a class action law suit against Facebook Ireland alleging the social media network violated European privacy protection laws and partook in the NSA’s Prisim program, which collects data on individuals by utilizing stored internet data (Best, 2014). The suit was first filed in the Commercial Court of Vienna Austria, which was rejected and transferred to Vienna’s Regional Court based on a procedural decision (Essers, 2014). On August 21, 2014 Vienna’s Regional Court accepted to hear the class action suit and gave Facebook four weeks to respond to the allegations. On September 26, 2014 Facebook petitioned the court to extend the four week response time due to court documents received were in German and no one in the company spoke German. Therefore, Facebook exercised their right to request all legal documents be translated in English and request an extension to respond. Issue

Did Facebook breach the European data protection law? Max Schrems has filed a class action suit and advised anyone outside the US and Canada can join. The suit is asking for € 500 for each member and sanctions to be placed on Facebook Ireland for breaches such as; failing to get “ effective consent” for using data, implementing a legally invalid data use policy, using big data to monitor users, and tracking users online outside of Facebook via “like” buttons (Facebook, 2014). Rule

This case is still ongoing. With the acceptance of this case, Facebook was required to respond to the suit and given a limited amount of time to do so. While Facebook used its rights to request an extension because all of documents were in German, so they requested these documents to be translated and Facebook given enough time to fully go over the allegations being made against them. The request for an extension was granted as it was found that no one in the company actually knew German and that Facebook had sound grounds in requesting the translation of documents. Analysis

Facebook was hit with an international class action privacy lawsuit and an Austrian privacy activist opened a broad class action lawsuit against Facebook Ireland for the breaching of the European data protection law (Clark, 2014). The breaches is as follows: failure to get efficient permission for using the data, implementing legal invalid data, tracking the users online outside of Facebook via “Like”, using large data in order to keep an eye on the users, failure to make Graph Search opt-in, unlawful passing of the user’s data to the outer apps, and the participation in NSA’s Prism program in which is basically designed to pull out personal data from the public’s internet use (Clark, 2014). Schrems is levying the attack of charges against Facebook for failing to the Irish regulators to take what he sees as adequate action. This case has been ongoing for three years and there is still no decision, but even though he or she usually promises a judgment to be made next month or sooner there is still no binding outcome from the complaints and the reason for the setback is still unclear and Europe vs. Facebook has not been privy to Face book’s own...


References: Best, J. (2014, August). Facebook forced to respond to privacy complaints of 25,000 Europeans. Retrieved from http://www.zdnet.com/facebook-forced-to-respond-to-privacy-complaints-of-25000-europeans-7000032840/
Clark, L
Nicholson, (2014). Legal Risks in International Investment. Retrieved from http://www.ehow.com/list_5914112_legal-Risks-international-investme
nt.html
Regulatory Compliance. (2014). Retrieved from http://en.wikipedia.org/wiki/Regulatory_compliance
Stempel, J
Whoriskey, P., & Hilzenrath, D. (2012, May). Investors sue Facebook, advisers as scrutiny of IPO hype intensifies. Retrieved from http://www.washingtonpost.com/business/economy/2012/05/23/gJQAmYfnlU_story.html
Willkie, Farr & Gallagher LLP
Zuckerberg, banks must face IPO lawsuit: judge. (2014). Retrieved from http://www.reuters.com/article/2013/12/18/us-facebook-ipo-lawsuit-idUSBRE9BH0VD20131218
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