Dr. Hal Singer’s Analysis Supports Facebook User Class Certification in Landmark Privacy Case

On October 30, a federal judge in the Northern District of California certified a class of Facebook users in a landmark privacy case based in part on the economic models of Dr. Hal Singer. This marks the 19th time a federal or state court has certified a class in reliance on Dr. Singer’s modeling of impact.

The complaint in In re Meta Pixel Healthcare Litigation alleges that although Facebook (the social media website owned by Meta) offered assurances in its user agreement that it would not acquire a user’s sensitive healthcare information—including patient status, health conditions, and prescription drug and medical device use—Facebook in fact acquired that sensitive data in violation of consumer protection laws. Dr. Singer used a conjoint survey to estimate the compensation that Facebook users would have demanded at the time they signed the user agreement, had they understood how Facebook would acquire their sensitive data. In particular, Dr. Singer utilized a willingness-to-accept (WTA) model, as the economics literature on privacy dictated such an approach.

Meta’s lawyers challenged Dr. Singer’s model, asserting that the WTA approach had not been used in litigation. The court rejected those arguments, ruling that Dr. Singer’s model was an accepted methodology and was admissible:

“Here, Singer’s WTA survey puts the consumer into the position of the person selling the product, asking how much they value the information that Meta improperly acquired and how much they would be willing to sell it for. Meta argues that this particular approach has never been accepted by a court, and what Singer should have done is determined the demand for the consumers’ data and how much companies would have been willing to pay for that data. Meta also argues that WTA surveys are well known to inflate results, and points to an academic study (relied on by Singer) that argues against “uncritical use” of those surveys. I find at this juncture that Singer’s decision to utilize a WTA survey – an accepted methodology put to a slightly different purpose in this type of case – is admissible. Meta’s criticisms go to weight, not admissibility. Meta and its experts can point out the literature expressing caution in use of the model and its risk of inflation.”

The court also rejected Meta’s arguments relating to Dr. Singer’s use of a “fixed demand” to estimate a market price, and to whether his model matched the plaintiffs’ theory of harm under Comcast.

Dr. Singer was assisted by Econ One economists Kathryn Kaduck and Gavin Sicard.