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). The lawsuit claims H&R Block misled customers by using ambiguous wording in consent and programming agreements with Meta and Google. The lawsuit asserts that Meta and Google collaborated with H&R Block to deceive customers about H&R Block data 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 alleged operation collected taxpayer names, social security numbers, addresses, incomes, filing statuses, refunds, deductions, dependents, properties, birthdates, and education expenses.
The lawsuit accuses the firms of violating federal eavesdropping, privacy laws, and the Internal Revenue Code in California’s US District Court.
The plaintiffs’ attorneys claim the lawsuit holds three firms accountable for using pixels that tracked customer-submitted information on 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, when an H&R Block customer registers on Meta’s Facebook or Instagram, the system sends a “dossier” of the user’s online actions to their smartphone. According to the lawsuit, technology enables Meta and Google use spyware to illegally 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, use spyware and extremely sensitive personal financial data are entered into websites.
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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