Big Tech Vs. Big Privacy Lawsuits
Jay Edelson grew up poor among rich kids outside Boston. He seethes at the recollection of other boys smashing their $200 tennis rackets he could not afford, and of his parents scolding him for trying to spend the $20 he had earned raking leaves.
Today, Edelson, a 46-year-old attorney, still has a chip on his shoulder, but now he directs his anger at other targets—mostly tech companies that play fast and loose with consumer privacy. His Chicago-based firm has filed hundreds of class-action cases against companies like Google, Uber, and Amazon for allegedly misusing the personal information of their users.
“Consumers’ data is a commodity—it’s gold; it’s oil. Courts are starting to recognize that companies are misusing it,” says Edelson.
These days, class-action attorneys like Edelson are in a feeding frenzy amid a soaring number of corporate data scandals. Every week, it seems, news articles expose another company’s unsavory data-collection practices, hacking, or careless product design.
In January, for example, Apple admitted that a glitch enabled users of its FaceTime video-chat service to surreptitiously listen to someone they had called but who had not yet answered. Meanwhile, Facebook is grappling with a series of privacy stumbles, including a major breach of user data.
Edelson’s aggressive legal tactics have translated into hundreds of millions of dollars for consumers in cases involving everything from spam texts to spyware. And, yes, he’s made good money for himself too.
Among other things, Edelson’s firm is known for its hands-on approach to technology, which includes a team of engineers who probe apps and gadgets in a search for data leaks. If they find one, they pounce. In one of Edelson’s more colorful triumphs, his firm won $3.75 million for clients from a Canadian company after discovering its app-controlled sex toy was secretly recording data such as how often the owners used the device.
Currently, Edelson is battling Facebook in a closely watched class-action suit over Facebook’s allegedly scanning faces in photos on its service without user permission. He’s also doing mop-up work on a seminal Supreme Court case his firm litigated involving data brokers, those shadowy companies that collect and resell consumer information.
Edelson says that all the recent corporate privacy missteps have made arguing his cases far easier than it was just a few years ago. “When we go to court, judges look at us differently. They view this as important rather than just confusing,” he says.
But even if judges are more sympathetic, consumers are finding it harder to get a hearing in the first place. That’s because companies increasingly require users who have complaints to argue their cases in private arbitration, in which rules block plaintiffs from banding together to seek a large financial judgment.
Edelson, however, shrugs off the arbitration obstacle by saying it just means a shift in tactics. In particular, he points to how his firm has been working more closely with state and municipal governments. In practice, this involves handing off its legwork on potential cases to an attorney general, who can then sue under state laws covering deceptive business practices. In return, Edelson’s firm is paid as a consultant or receives a cut of any settlement.
Not everyone is impressed with Edelson’s creativity. Oriana Senatore, a senior vice president with the Institute for Legal Reform, an affiliate of the pro-business U.S. Chamber of Commerce, suggested that Edelson and his firm are akin to high-tech ambulance chasers.
“We agree they’re early movers in privacy and technology, but they’re just using an old blueprint in a new neighborhood,” she says.
Brian Fitzpatrick, a Vanderbilt University law professor, shares some of Senatore’s concerns. Law firms working with state attorneys general create potential conflicts of interest, he says, including the risk of AGs being influenced by campaign contributions.
The worries may not be unfounded; Edelson’s firm has made a number of $10,000 donations in Illinois, including to the state’s current attorney general. Edelson responds that his firm backs politicians who “care about the same issues we do.” Fitzpatrick says forced arbitration is the greater harm because it deprives consumers of the right to sue and shields companies from accountability.
Surprisingly, for someone the New York Times once called one of the most hated in Silicon Valley, Edelson is mild in person. Sitting in the firm’s office, which includes an indoor volleyball court and a black dog named Lila, he talks of expanding his practice to represent plaintiffs like the victims of California’s wildfires.
Says Edelson: “I always wanted to have impact on the most critical issues of the day.”
A version of this article appears in the March 2019 issue of Fortune with the headline “Big Tech Vs. Big Lawsuits.”