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Tech Giants Oracle and Salesforce Accused of Violating EU GDPR

Two American multinational tech companies Oracle Corporation (NYSE: ORCL) and Salesforce.com Inc (NYSE: CRM) are facing a multi-billion dollar class-action lawsuit for violating EU General Data Protection Regulation (GDPR) in their processing and sharing of data for advertising purposes.

The lawsuit was filed by a nonprofit organization Privacy Collective whereby it alleged the two companies are misusing consumers’ personal data through their third-party cookies Bluekai and Krux.

Third-party cookies are essentially used for dynamic ad pricing services. According to the plaintiff, the two entities have been reselling personal data to third parties outside the EU without users’ consent.

“Everyone who has ever used the internet is at risk from this technology. It may be largely hidden but it is far from harmless,” said Dr. Rebecca Rumbul, class representative and a claimant on the suit in England and Wales.

“In their defense, Oracle general counsel Dorian Daley called the action “meritless” and a “shake-down”, accusing the Privacy Collective of basing its claim on “deliberate misrepresentations of the facts”.

“Oracle will vigorously defend against these baseless claims,” he added.

On the other hand, a spokesperson for Salesforce said the company disagrees with the allegations and intends to demonstrate they are without merit.

The class action lawsuit against the two tech companies was filed in Amsterdam with a similar claim expected to be filed at the High Court in London later this month. It is anticipated that the lawsuit could cost Oracle and Salesforce up to €10bn.

The General Data Protection Regulation (GDPR) is a regulation in European Union law on data protection and privacy in the European Union and the European Economic Area. The law also addresses the transfer of personal data outside the EU and EEA areas.

If the lawsuit goes in favor of the plaintiff, the two American tech giants will lose billions of unwarranted revenue. In the bigger picture, it will be a huge blow especially during the coronavirus pandemic that has rendered most companies to operate in losses.

CRM shares were down 0.26% in the pre-market to trade around $195.65. The CRM shares added $19.98% YTD and up 13.90% in the past three months.

On the other hand, ORCL shares were up 0.13% in the pre-market to trade around $54.09. Generally, the Oracle shares have stagnated around the same figure they opened the year with despite the March stock volatility.

The lawsuit might drag the two companies into years if not months of court proceedings that will damage their business operations. As a result, negatively affect their revenue and share value in the near future.

Tech Giants Oracle and Salesforce Accused of Violating EU GDPR

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