Picture: REUTERS
Picture: REUTERS

Sydney — Litigation funder IMF Bentham is preparing to potentially sue social media giant Facebook in Australia over its sharing users’ data with political consultancy Cambridge Analytica.

Facebook said in April that data of up to 87-million people ended up in the hands of Cambridge Analytica, which was employed by Donald Trump’s 2016 US presidential campaign.

In Australia, more than 311,000 users’ data may have been used without authorisation, Facebook said in April, when Australia’s information commissioner, the country’s privacy regulator, began to investigate.

IMF Bentham said it has complained to the information commissioner, alleging breaches of privacy laws over the data sharing. A class action lawsuit seeking compensation for users could follow depending on the regulator’s response, IMF Bentham said.

On Tuesday, a Facebook spokesperson did not comment directly on IMF Bentham’s statement but said the company was "fully co-operating with the investigation currently underway by the Australian privacy commissioner," using the former name of the information commissioner.

The London-based consultancy Cambridge Analytica filed for bankruptcy in May and was unavailable for comment. It said previously that it deleted the data and did not use it in Trump’s campaign.

Facebook has faced widespread criticism from users and scrutiny from regulators and lawmakers around the world since news broke that users’ data had been shared. It has also been sued.

Nathan Landis, an investment manager at IMF Bentham, said the firm already had a prime litigant, a Sydney man who did not want to be identified. "There’s just not that much precedent, certainly not for the sort of scale that we’re talking about here," he said, referring to the potential number of litigants.

The information commissioner closes most investigations within a year, so IMF Bentham said it may be some time before it decides whether to pursue a lawsuit or not — with Landis adding it may wait for regulatory investigations in the EU and Britain to conclude before making a move.