Costco Sued, Accused Of Sharing Confidential Health Data With Facebook

Costco Wholesale Corp COST is facing legal action, accused of sharing sensitive customer information with Meta Platforms Inc META, the parent company of Facebook, without the customers' approval. 

A Seattle federal court lawsuit claims that the wholesale giant used Meta's analytical tool, Meta Pixel, on its website, compromising the privacy of its customers.

The tool, designed to track website visitors and their activities, allegedly provided Meta with access to a wealth of personal data, including susceptible health information of pharmacy users, the New York Post reports. 

This revelation raises concerns about user privacy and data security, especially for customers who rely on Costco's online pharmacy services.

The plaintiffs, four California residents, assert that Costco assured them of the confidentiality and security of their data on its platform. However, the lawsuit alleges that the company did not disclose its practice of sharing online activities and health information with Meta via Pixel, implying a violation of privacy and a breach of Washington State's privacy laws, prohibiting user data's unauthorized sharing, the NY post writes.

Although not named as a defendant, Meta clarified its position, emphasizing that its policies prohibit advertisers from sending sensitive information about individuals through its Business Tools. 

The company asserts that it educates advertisers on the proper setup of Business Tools to prevent such occurrences and that its system is designed to filter out potentially sensitive data, according to the NY Post.

The plaintiffs are demanding a trial by jury, financial damages, and a declaration of Costco's alleged unlawful conduct. 

In 2023, the Irish Data Protection Commission slapped Meta with a penalty of a record €1.2 billion ($1.3 billion) for user privacy invasion.

Price Action: COST shares traded higher by 0.39% at $564.26 on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.