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We're diving into a critical Supreme Court case involving Facebook's alleged misrepresentation of user data risks. Discover how this ruling could reshape shareholder rights and the social media landscape. Stay tuned for insights from our legal analyst, Khalif Rhodes. #SupremeCourt #FacebookDataBreach #ShareholderRights #LegalAnalysis #DataPrivacy #KhalifRhodes #SocialMediaLaws #CorporateResponsibility #FTC #SEC
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you are looking live on Capitol Hill
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where US Supreme Court Justices are set
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to make a ruling on a lawsuit involving
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a Facebook data breach a group of
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shareholders filed a lawsuit against the
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social media giant accusing it of
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misleading them about the misuse of user
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data Queen City News Chief legal analyst
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khif fro joins me now and khif what are
0:18
they claiming here that happened uh
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they're claiming that they fail to
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disclose this risk I mean and this is a
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very very complicated case and but I'll
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attempt to break it down as easy as I
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can so folks can suggested I mean you
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had this situation that was happening in
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2015 with the with the um misinformation
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disinformation during the election
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process um and then but folks really
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didn't find out about it till 2018 then
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what you have happened is Facebook makes
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a risk disclosure because they're a
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publicly traded company they have a
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responsibility to their shareholders to
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let them know the risk that they're
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about to walk into if you are actually
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going to invest in this company each
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shareholder is an investor and so if I'm
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going to invest in this company you got
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to let me know what am I'm walking into
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and so they made a blanket risk
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advisement that look this is the
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potential risk that you could be walking
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into but in that risk disclosure they
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never mentioned that hey what we're
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actually telling you that could happen
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already happened in the past and you
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would think that there would be
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something on the books that would
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require companies to to tell you what
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happened in the past is actually not
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some hypothetical but it happened and so
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this is where we are now which uh
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technically did they follow exactly what
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they were supposed to in in in giving
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the they did the bare minimum they did
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the bare minimum and they gave them the
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risk disclosure and it's kind of like um
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uh the Justice Kavanaugh talked about
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this like they a lot of the Justice were
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extremely skeptical of you you tell
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folks that hey you could potentially
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fall down these steps that are in the
1:45
front of your house while failing to say
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that hey just last week 20 people fell
1:49
down those same steps well in real life
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you would say that but in this situation
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they're not required to and so they're
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just letting you know that hey there is
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a risk that you could potentially fall
1:59
down the step put it in dollar terms
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there's a potential that our underlining
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asset could potentially lose some money
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and because it could lose some money you
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should be on notice that you could lose
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money and that you could be exposed to
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these things without saying that we've
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already been exposed well how is the the
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the court viewing this case and also
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isn't there are some broader uh security
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issues that are going on here with
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Facebook the court is is viewing this
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very very skeptical I mean I listen to
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oral arguments I mean this is another
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example of wishing that there were
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cameras in the courtroom specifically in
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federal courts so you can see the facial
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expr but you can hear the skepticism
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from the justices that they're not
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buying the argument but I do understand
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and appreciate the argument that was
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made by their Council that listen we did
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what was required by the STC and FTC at
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the time that these organizations and
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these Regulatory Agencies have a process
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in place and we followed that process we
2:49
did exactly what we were supposed to do
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and he said we can't take in the account
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he gave a road analogy Council said that
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if you see a sign that says roads can
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potentially flood that's enough of a
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warning for you to know that this road
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can flood there's no need for you to put
3:04
on that street sign also the list of
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times that the roads have flooded I
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think that was a novel argument however
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I don't think the court was buying that
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in terms of the broader applications all
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of these social media companies have
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been attacked by the FTC and the SEC for
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a number of times but specifically the
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FTC with attempting to trying to wind
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down and wean down their process this is
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no different they were just hit with a
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$5 billion fine from the TC however if
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you look at it that's only 9% of their
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revenue from 2018 so even though 5
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billion sounds like a lot that's not a
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lot to a company that's bringing in
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those numbers times a 100 every year so
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the courts got a little bit of a win in
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Facebook because they got them to
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respond consumers can never get a
3:47
response out of Facebook when you talk
3:49
well listen if you're the Supreme Court
3:50
I think everyone is responding if you're
3:53
every day Joe American it is a little
3:55
bit harder to customer service is
3:56
obsolete there Chief legal let FR things
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