Class Action Claims Houseparty App Shares User Data with Third Parties—Including Facebook—Without Consent

The companies behind the Houseparty video-chatting app fail to disclose to users that their personal information is being shared with third parties such as Facebook, a putative class action lawsuit alleges.

The 25-page suit charges that while Houseparty operators Life on Air, Inc. and Epic Games, Inc. have assured users that they have “not ever sold your data and will not ever sell your data,” the defendants routinely send customer information and analytics to Facebook and other companies without notification or consent.

According to the lawsuit, user information is sent to Facebook via “software development kits” the moment the Houseparty app is opened on any Apple or Android device, as well as on PCs and through Google’s Chrome extension. Consumer information shared with third parties without consent is then used for targeted advertising purposes, the complaint says.

The case alleges the defendants’ conduct has invaded Houseparty users’ reasonable expectations of privacy and amounts to a predatory business practice. Consumers would not have entrusted their data to the defendants had they known Houseparty would share this information without consent, the lawsuit argues.

Stay in touch, but stay at home

The varying degrees of lockdown under which most of the country is living due to the COVID-19 pandemic has seen video conferencing apps such as Houseparty and Zoom flourish. While it can be argued that Houseparty is neck and neck with Zoom in terms of popularity and usage, the app has also joined its competitor in facing a barrage of allegations concerning its apparent mishandling of users’ personally identifiable data.

The lawsuit alleges Houseparty does not disclose that “portions” of user data relating to cookies, as well as information connected with advertising and retargeting, are being made available to third parties. According to the case, the Houseparty feature that allows users to login with their Facebook accounts has enabled the social media titan to gather:

The lawsuit further claims Houseparty allows Facebook to gather personally identifiable information even on those who do not have Facebook accounts.

The lawsuit emphatically alleges that the collection of Houseparty users’ unique advertiser identifiers is particularly invasive given the alphanumeric string is “used to identify an individual device – and the individual who uses that device” to track and profile the user. According to the complaint, companies that utilize unique advertiser identifiers do not need to know an individual’s name, physical address or email address in order to identify that person for targeted advertising.

“Advertisers use this information to learn about users, including when and how they access the application, customer’s [sic] location, along with their behaviors, demographics, and preferences, so that they can serve them with tailored and targeted advertising,” the lawsuit says, emphasizing the “tremendous economic value” placed on consumer advertising data.

Unbeknownst to Houseparty users

As the suit tells it, the vulnerability of consumers’ personally identifiable information to impropriety and mishandling has never been more apparent with so many stuck inside and online due to the pandemic. The complaint alleges that Houseparty users had no way of knowing their data was being shared with third parties and Facebook given all they did was open the app. Moreover, at no point did Life on Air or Epic Games afford Houseparty users the opportunity to opt out of having their information accessed and then sold to third parties, the case claims.

In all, the defendants offer users no way to monitor whether their information is being shared nor any reasonable method of knowing that their data is being gathered by other companies. While the defendants’ privacy policy states that certain categories of identifiable data—including names, passwords, email addresses, and social media account information—are collected, the companies make no reference to any information transfer between Houseparty, Facebook or any other third party.

“[Houseparty] promises customers that its application allows them to ‘connect with anyone you want’ and promises that ‘Houseparty is secure’ and further promises [sic] that there has been ‘no data breaches and no exposure of customer data or third-party accounts,’” the complaint says. “Houseparty violated its promises to its customers with these predatory business practices without users [sic] authorization or consent and breached Plaintiff’s expectations of privacy.”

Especially egregious

The lawsuit rounds out in alleging the defendants’ data sharing is “especially egregious” given Facebook’s well-publicized track record of negligence when it comes to safeguarding consumer privacy. Facebook’s entire business model relies on sharing personal information with third parties for advertising purposes, the case asserts, and the company itself has acknowledged that it shares such data with app developers and advertisers as part of its regular business operations.  

Notwithstanding Facebook’s history, the lawsuit says that the social media platform itself “urged” Houseparty to share the fact that it was disclosing user data with the company. According to the case, the terms of use for Facebook’s Business Tools stipulate that applications that utilize the company’s software development kit “represent and warrant that you have provided robust and sufficiently prominent notice to users regarding the customer data collection, sharing, and usage.” Further, Facebook adds that apps must explain to users that third parties may collect or receive their information for “measurement services” or targeted ads while including prominent links to how and where users can opt out.

The lawsuit alleges Houseparty “did not display these disclosures or offer a link to Facebook’s data collecting activity” or offer an opportunity to opt out.

Who’s covered by this lawsuit?

The lawsuit looks to cover California residents who accessed the Houseparty app and had their personally identifiable information disclosed to unauthorized third parties, including Facebook, without consent from January 1, 2020 through April 17, 2020.

It’s important to note that although the case looks to cover only California residents, it’s possible that additional putative class actions will be filed looking to represent consumers nationwide or in other states.

How can I join the suit?

You generally don’t have to do anything in order to join or participate in a class action lawsuit, at least not at first. The suit still has a long way to go before consumers will need to take action and that may come to pass only if the case isn’t tossed first. For now, while it’s still too early to read the tea leaves, it’s best to sit tight. We’ll keep this page updated with any developments.

The complaint can be found below.