Data Privacy Week, recognized this year during the week of January 22-28th, is part of an international awareness campaign to educate both businesses and individuals about just how important online privacy is in today’s ever-changing times. One way to do that is to explore what new technology terms mean and also examine the impacts of that technology.

Tracking pixels are just one example.  Pixels, and megapixels, are terms often used to describe a camera’s resolution or to emphasize product capabilities in an advertising context. The megapixel resolution of various camera options in smartphones is highlighted and examined when customers are looking to purchase that always sought-after new and improved phone.

“Tracking pixels” are a relatively new term and have a very different meaning and function.  Tracking pixels are generally utilized as a marketing tool to track user behavior. A marketing/editorial platform, CoSchedule, defines a tracking pixel under its marketing definition terms as “a 1×1 image created with a small piece of HTML coding, used to track behavior when a user lands a website page or clicks into an email.” This type of new technology could have far-reaching impacts and has already affected multiple industries.

Tracking Pixels: What does it mean and how could it impact you at an individual and/or business level?

The following examples demonstrate just how impactful tracking pixels can be across industries. The healthcare industry, media outlets, and professional sports are only a small microcosm of how this new marketing tool can significantly affect both user and industry behavior.

  • The Healthcare Industry

In today’s healthcare world, online patient portals are a frequently used tool to interact with patients and exchange data in a variety of capacities. In Re Meta Pixel Healthcare Litigation was a 2022 California class action case that involved patient portals and more specifically the Meta Pixel, a customizable free piece of code that the plaintiffs alleged had been incorporated into their patient portals.  The lawsuit alleged that this tracking pixel allowed Meta (formerly Facebook) to intercept, collect and track confidential health information across patient portals for four healthcare providers, and that such collected information was used for targeted, customized advertising and monetary gain.

  •  Media Outlets

Like others, media outlets also want to see what their consumers are interested in. Belozerov v. Gannett Co., Inc., a 2022 Massachusetts class action, involved allegations that USA Today, owned by Gannett Co., Inc., had unlawfully disclosed the personal identifiable information or “PII” of its customers to Facebook through a pixel developed by the social media platform, violating the Video Privacy Protection Act (“VPPA”). Specifically, this pixel would allow for the tracking of USA Today website or app video media users, and such information would then be transmitted to Facebook. This information would include information, such as a Facebook ID from its users, a URL, and the name of the video content. Again, such information is used for targeted consumer advertising. Both monetary and injunctive relief were sought here. Ultimately, Gannett’s motion to dismiss was denied.

  • Professional Sports

Finally, sports fans frequently visit their favorite team’s website, and National Football League (“NFL”) team websites are no different, especially during the prime of the season. In Alex et al. v. NFL Enterprises, LLC et al., the 2022 New York class action complaint brought against both the NFL and NFL Enterprises, LLC describes how PII was transmitted to Facebook based on the pixel tracking utilized across team websites, including monitoring what videos a particular user viewed. These videos were part of team newsletters that fans subscribed to and such PII was then allegedly transmitted to Facebook. As part of this process, informed written consent to the use of such tracking methods was not requested, and the Facebook Pixel was used as part of this tracking. The purpose behind such tracking was again to craft more targeted advertising campaigns. In addition, the VPPA was also at issue here, and both monetary and injunctive relief was sought.

Cyber Insurance and Tracking Pixels

The above cases are illustrative of just some of the data privacy concerns and consumer protection issues associated with tracking pixels. As the examples demonstrate, tracking pixel technology affects many different industries and poses a litigation risk, one that should be evaluated as part of an organization’s risk management program.  Cybersecurity in general, including data privacy issues, has become one of the most important topics in the insurance industry today, according to the National Association of Insurance Commissioners’ Center for Insurance Policy and Research. Many standard general liability programs do not offer coverage for such cyber risks; rather, those interested in securing such coverage would need to further investigate the options of cyber liability coverage that could be tailored to fit the unique needs of that particular client.  Certain cyber markets may offer coverage under the umbrella of network security and privacy liability, and such coverage may include both damages and defense expenses associated with a claim arising from either a security or privacy breach. In addition, regulatory investigations, fines, and penalties could also be involved in such situations, and again the Insured would most likely be responsible for such expenses incurred.

As best articulated in In Re Meta Pixel Healthcare Litigation, “while privacy is important, it is also fragile: with a mere click of the mouse, one’s personal information may be disseminated to the world. There is no way to undo a loss of privacy.”

By: Jessica Cambridge

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