Class actions against TikTok and X: A landmark legal battle for Data Privacy and AI Accountability

A significant legal development is unfolding in Germany and it could reshape the landscape of data privacy and AI regulation. Spirit Legal, a German law firm, is leading four cross-border class action lawsuits against TikTok and X (formerly Twitter), filed on behalf of the Dutch Foundation for Market Information Research (SOMI).

The lawsuits target violations of critical European laws, including the Digital Services Act (DSA), the General Data Protection Regulation (GDPR), and the EU AI Act, over alleged violations of user privacy, data misuse, and the ethical use of AI algorithms.

These legal actions have far-reaching implications for data privacy, artificial intelligence, and the protection of consumers online and it is a pivotal moment in how the tech industry, regulators, and users address the ethical use of data and AI systems.

The rise of class actions against social media giants

Class action lawsuits, which allow a group of individuals to collectively sue a company on a similar ground, have become a common method for holding large corporations accountable. In the case of TikTok and X, the lawsuits focus on the misuse of personal data and AI algorithms.

TikTok, a platform owned by the Chinese company ByteDance, has rapidly grown to become one of the most popular social media apps worldwide, especially among younger audiences. However, its growth has also been accompanied by growing concerns over how it collects and handles user data, particularly sensitive information such as location, browsing history, and even biometric data through facial recognition. Additionally, TikTok’s algorithms, which determine what content users see, have been accused of unhealthy behaviours, misinformation, and invasion of privacy.

X, which was rebranded from Twitter after Elon Musk’s acquisition in 2022, has faced similar accusations. As a platform that relies heavily on AI-driven algorithms to schedule user timelines, show posts, and recommend content, X has been accused of misusing its AI capabilities. The primary concerns are the lack of transparency about data collection, how user information is used by these algorithms, and the potentially harmful consequences, including the usage of strong content or misinformation.

Both TikTok and X are now fighting class action lawsuits that point out these platforms misused personal data, failed to adequately disclose how AI algorithms work, and violated privacy laws in various jurisdictions. But what exactly are the key issues?

The case against TikTok: Unlawful manipulation and exploitation of User Data

TikTok has faced increasing observation over its use of algorithms and data, and it is now the subject of legal action for allegedly exploiting sensitive user data and manipulating young audiences. The platform’s design, which uses behavioural psychology to maximize user engagement, according to these lawsuits, is considered a violation of the EU AI Act. The Act by itself prohibits manipulative and exploitative AI practices, particularly those that harm minors. 

TikTok has been particularly under fire for how it collects and uses user data, especially given its popularity among minors. Critics argue that TikTok collects detailed personal information from its younger users without clear consent or sufficient safeguards in place to protect them. Also, their algorithms are known for their ability to keep users engaged by showing them an endless stream of videos based on their preferences and previous interactions. However, the exact mechanics of how this algorithm works are a mystery. Users often have little understanding of how their data is being used through these recommendations and there is concern about the algorithm’s ability to manipulate users’ emotions and behaviour.

The case against X: Data breaches and unauthorized Data Use raise alarming concerns

X is also facing legal action in these lawsuits, with allegations including the failure to report significant data breaches and a lack of transparency regarding data protection practices. Even more concerning is X’s use of sensitive personal data to fuel its recommendation algorithms without obtaining user consent. This unauthorized processing of personal information threatens individual privacy rights.

X has faced additional accusations that it collects excessive amounts of personal data through its AI systems, including tracking user activity across different devices, apps, and websites. The platform’s AI-powered algorithms help to determine which tweets are shown in users’ timelines, what content is recommended, and which accounts are highlighted. This process often involves personal data, including behavioural data such as clicks, likes, retweets, and even where users are geographically located. However, many users are unaware of how their data is being used or how their content is being processed by the platform’s AI.

What’s at stake: Demanding accountability for Users and Society

The lawsuits demand a series of key actions from TikTok and X, including:

1. Ban on unlawful profiling
2. Stronger child protection measures
3. Financial compensation for affected users:

•TikTok: Compensation between €500 and €2,000 per user, affecting an estimated 20 million German users
•X: Compensation ranging from €750 to €1,000 per user, impacting an estimated 11 million German users.

The future of Data Privacy and AI regulation

As the lawsuits against TikTok and X progress, the cases could define the boundaries of the Digital Services Act, GDPR, and the EU AI Act. They represent a critical test for how the European Union enforces its digital laws and holds tech giants accountable for their actions. The outcome could have wide implications for other platforms, setting new precedents for data protection, AI usage, and online safety.

Ensure your organization is prepared for the EU AI Act

If your organization isn’t fully prepared for the EU AI Act, NOW is the time to act. Don’t risk non-compliance and the potential legal consequences that come with it. We can guide your businesses through the AI regulation, ensuring you meet all necessary compliance standards. From AI risk assessments and AI Literacy programs to developing tailored compliance sets and implementing ongoing employee training, we offer the tools and expertise you need to stay ahead. 

Reach out today and protect your organization from costly legal battles and penalties. Contact us at [email protected]

Disclaimer: This blog post is intended solely for informational purposes. It does not offer legal advice or opinions. This article is not a guide for resolving legal issues or managing litigation on your own. It should not be considered a replacement for professional legal counsel and does not provide legal advice for any specific situation or employer.