A new Class Action lawsuit has been filed against Apple in Boston Massachusetts by Plaintiffs Adam Christensen, Jeffrey Scolnick, and William Farrell individually and on behalf of all others similarly situated. The lawsuit revolves around Apple demanding the collection of Personal Identification Information (PII) in order to conclude a sale which is against Massachusetts law. In addition, the lawsuit alleges that Apple illegally sells consumer's PII without compensating them for it.
Nature of the Action
Massachusetts Gen Laws chapter 93 § 105(a) addresses and prevents the misuse and improper collection of personal identification information by retailers, and recognizes that there is no legitimate need to obtain such personal information from credit card customers except to the extent it is strictly necessary to complete the transaction.
2. Specifically, Mass. Gen Laws chapter 93 § 105(a) states that:
No person, firm, partnership, corporation or other business entity that accepts a credit card for a business transaction shall write, cause to be written or require that a credit card holder write personal identification information, not required by the credit card issuer, on the credit card transaction form. Personal identification information shall include, but shall not be limited to, a credit card holder's address or telephone number.
This action arises from Apple's violation of the noted law through its practice of requiring, as a condition of using a credit card to make a purchase, Plaintiffs' and the Class members' personal identification information, specifically their ZIP codes. This conduct constitutes violations of the Massachusetts law as outlined above.
Accordingly, Plaintiffs bring this action on behalf of the below-defined Class and seek statutory damages pursuant to Massachusetts Gen Laws chapter 93A § 9, double or treble damages pursuant to Massachusetts Gen Laws chapter 93A § 9, injunctive relief; and costs and attorneys' fees.
Plaintiff Adam Christensen shopped for and purchased items at an Apple retail store location in Chestnut Hill, Massachusetts on July 10, 2012, and Peabody, Massachusetts on February 18, 2013, again on February 18, 2013, and March 11, 2013.
Plaintiff Jeffrey Scolnick shopped for and purchased items at an Apple retail store location in Natick, Massachusetts on September 20, 2012, September 21, 2012, and November 2, 2012.
Plaintiff William Farrell shopped for and purchased items at an Apple retail store location in Dedham, Massachusetts on November 25, 2012.
To consummate each purchase, Plaintiffs elected to use their credit card as their chosen form of payment.
As a condition of using their credit cards, Plaintiffs were required by Apple to enter personal identification information associated with the credit card, including their full and complete zip codes. Apple would not allow Plaintiff to complete their purchases without supplying such information.
Apple is not required by credit card issuers to require this information from consumers.
Apple recorded Plaintiffs' zip code into an electronic credit card transaction form. Apple continues to store Plaintiffs' personal identification information, including Plaintiffs' names, zip codes, and credit card numbers, in its databases.
The Supreme Judicial Court of Massachusetts has determined that a zip code constitutes personal identification information ("PII") within the meaning of Mass. Gen Laws chapter 93 § 105(a).
Apple Sells Consumers' Personal Identification Information for Profit
According to the formal complaint before the court, "Apple's website states that Apple sells consumers' PII – including Plaintiffs and the Class' PII – to third-parties for profit:
At times Apple may make certain personal information available to strategic partners that work with Apple to provide products and services, or that help Apple market to customers.
Consumers Place a High Value on Their PII
The complaint further states that "At a Federal Trade Commission ("FTC") public workshop in 2001, then-Commissioner Orson Swindle described the value of a consumer's personal information as follows:
The use of third party information from public records, information aggregators and even competitors for marketing has become a major facilitator of our retail economy. Even [Federal Reserve] Chairman [Alan] Greenspan suggested here some time ago that it's something on the order of the life blood, the free flow of information.
Though Commissioner's Swindle's remarks are more than a decade old, they are even more relevant today, as consumers' personal data functions as a "new form of currency" that supports a $26 billion per year online advertising industry in the United States.
The FTC has also recognized that consumer data is a new – and valuable – form of currency. In a recent FTC roundtable presentation, another former Commissioner, Pamela Jones Harbour, underscored this point by observing:
Most consumers cannot begin to comprehend the types and amount of information collected by businesses, or why their information may be commercially valuable. Data is currency. The larger the data set, the greater potential for analysis – and profit.
Recognizing the high value that consumers place on their PII, many companies now offer consumers an opportunity to sell this information to advertisers and other third parties. The idea is to give consumers more power and control over the type of information that they share – and who ultimately receives that information. And by making the transaction transparent, consumers will make a profit from the surrender of their PII. This business has created a new market for the sale and purchase of this valuable data.
Claims Alleged In-Part
The Class Action filed with the court noted that "Apple has violated, and continues to violate, Mass. Gen Laws chapter. 93 § 105.
Mass. Gen. Laws chapter 93 § 105(c) provides that: "Any violation of the provisions of this chapter shall be deemed to be an unfair and deceptive trade practice, as defined in section 2 of chapter 93A."
Accordingly, Apple's violations of Mass. Gen Laws chapter 93 § 105 constitute unfair and deceptive trade practices within the meaning of Mass. Gen Laws chapter 93A § 2.
First, Plaintiffs and the Class have been injured because they have received unwanted marketing materials from Apple as a result of having provided their zip codes when using credit cards at Apple. Second, Plaintiffs and the Class have been injured by Apple's sale of Plaintiffs' and the Class' PII to third-parties, which was collected by Apple in violation of Mass. Gen. Laws chapter. 93 § 105(c). And third, Plaintiffs and the Class have been injured because Apple misappropriated their economically valuable PII without consideration.
More than 30 days prior to filing suit, Plaintiffs made a pre-suit demand pursuant to Mass. Gen Laws chapter 93A § 9(3) (the "93A Demand"), in which Plaintiffs sought: class-wide relief limited to statutory damages of $25 pursuant to Mass. Gen Laws chapter 93A § 9, for each violation of Mass. Gen Laws chapter 93 § 105; injunctive relief; and reasonable attorneys' fees and costs. Apple did not accept the terms of this demand.
Apple's failure to accept the terms of this demand was made in bad faith, because Apple has knowledge or reason to know that the practice complained of does, in fact, violate Mass. Gen Laws chapter 93 § 105 and Mass. Gen Laws chapter 93A § 9, and that Plaintiffs and the Class are entitled to the relief demanded as a matter of law.
Accordingly, Plaintiffs and the Class are entitled to double or treble damages as a result of Apple's bad faith violations of Mass. Gen Laws chapter 93A § 9.
The class action lawsuit presented in today's report was filed in the Massachusetts District Court, Boston Office, under case number 1:2014cv10100. At present, no Judge has been assigned to the case.
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