Google (GOOG, GOOGL), Meta (META), and H&R Block (HRB) are facing a proposed class action lawsuit alleging they illegally coordinated to use spyware to collect and share taxpayers’ sensitive financial information.
A similar lawsuit was brought against Google and H&R Block in July, on the heels of a Congressional investigation into a data collection technology known as tracking “pixels” used to generate lucrative targeted ads. The case alleges the companies conspired to collect and exploit data on hundreds of H&R Block customers, without their consent.
Millions of websites have pixels running in the background, some of which log visitor inputs in real-time. Companies handling entries containing sensitive financial information, like H&R Block, are prohibited by law from disclosing such information to third parties unless they have the customer’s permission.
Accounting offices of H&R Block in New York,. (Photo by: Newscast/Universal Images Group via Getty Images)In order to avoid breaking federal racketeering statutes and other laws, the lawsuit claims that H&R Block misled customers by utilizing ambiguous wording in customer consent agreements and programming agreements with Meta and Google. The lawsuit asserts that Meta and Google collaborated with H&R Block to deceive customers about the kinds of data that website developers like H&R Block may access.
The complaint claims that the defendants “knew that by concealing their involvement with one another… [they] could acquire and share [personal tax data] in contravention of the law for the defendants’ own financial gains.”
When Yahoo Finance asked for a comment, H&R Block, Google, and Meta did not immediately respond.
The information allegedly collected in the alleged operation included taxpayer names, social security numbers, addresses, adjusted gross incomes, filing statuses, refund amounts, deductions, dependents, income properties, birthdates, health savings account contributions, education expenses, and other data from their prepared returns.
The firms are also accused of breaking federal eavesdropping and privacy laws as well as the Internal Revenue Code, according to the lawsuit submitted to the US District Court for the Northern District of California.
The lawsuit, according to the plaintiffs’ attorneys, “seeks to hold the three firms accountable for using pixels that tracked nearly all information submitted by customers through HRBlock.com.” The organization is asking for punitive damages, an injunction to restrict the firms from utilizing pixels to gather sensitive information, as well as disgorgement of the value the defendants received from their usage.
Meta’s pixels
The plaintiffs claimed in their lawsuit that H&R Block had improperly used Meta’s Pixel software, which keeps track of the data that tax preparers enter into their online tax preparation portal in real-time. They said that each user of the H&R Block online tax preparation software receives a special digital identity that enables the spyware to monitor their activities on the H&R Block website as well as any other websites they visit that use Meta Pixel.
For instance, a “dossier” comprising the user’s online actions is sent to the user’s smartphone when an H&R Block customer registers on Meta’s Facebook or Instagram. According to the lawsuit, technology enables Meta to give its marketing partners “deep insights” into users’ internet behavior.
Google’s pixels
According to the plaintiffs, H&R Block and more than 70% of websites have Google Analytics installed, which enables less tech-savvy businesses to gather and send back to Google default user data like a user’s closest city, gender, and general interests. They assert that Google offers another pixel product, Google Tag, for more sophisticated businesses like H&R Block that gathers more detailed information on a web page visitor.
The complaint alleges that H&R Block improperly collected and forwarded to Google taxpayers’ names, certain health savings account contribution information, inquiries about scholarships and educational expenses made on H&R Block’s website, and visits to web pages pertaining to dependents, specific types of income, and specific tax credits or deductions.
According to the plaintiffs, major companies in the e-commerce sector, including H&R Block, Meta, and Google, are aware that extremely sensitive personal financial data entered into websites like that of H&R Block is a sort of money.
In 2022, Meta’s annual advertising revenue of $113.6 billion made up almost all of the company’s total revenue of more than $116 billion.
In 2022, Google made more than $160 billion in revenue from search advertising. That is more than half of the business’s $280 billion in annual revenue.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.
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