The U.S. Supreme Court has ruled in a long-awaited decision in the case of Spokeo, Inc. v. Robins. This case demonstrates the application of the Fair Credit Reporting Act ("FCRA") to various online and social profiling services.
Spokeo operates a "people search engine" on its website, which allows users to search for information about other individuals by name, e-mail address, or phone number. The information is gathered from a wide spectrum of databases, including social platforms. Spokeo markets its services to a variety of users, including employers who wish to evaluate prospective employees.
In this case, the plaintiff discovered that his Spokeo-generated profile contained inaccurate information, and filed a federal class-action complaint against Spokeo, alleging that the company failed to comply with the requirements of the FCRA, which requires consumer-reporting agencies to take reasonable steps to ensure the accuracy of the information published by them.
Overturning a lower court decision, the U.S. Supreme Court determined that the plaintiff did not demonstrate that he has suffered from a specific and particular injury, which is required in order for him to have the necessary standing (locus standi) when bringing class actions in a Federal Court.
The important outcome outcome of this decision is that the Supreme Court assumed that Spokeo qualifies as a consumer reporting agency under the FCRA’s requirements, and that Spokeo did not employ reasonable procedures in order to ensure the maximum possible accuracy, in violation of the FCRA (although the Court determined that the violation of the FCRA’s procedural requirements in this case did not result in material harm to the plaintiff).
This case reiterates the importance of complying with the FCRA’s requirements in the appropriate cases (see in this Client Update a related report concerning the FTC's guidelines on this issue).