Sports betting giant FanDuel is being sued for allegedly violating California privacy laws by using TikTok’s “trap and trace” software to track website visitors. The lawsuit, filed on July 30 in the U.S. District Court for the Central District of California, claims the software collects user data before cookie consent is given, violating California's Trap and Trace Law.
Using a process called “fingerprinting,” the TikTok software collects personal data from users who visit the website anonymously. This data is then matched against existing data that TikTok has already mined from hundreds of millions of Americans. The software can reportedly reconstruct the user's identity, allowing the company to run targeted advertising campaigns despite not receiving cookie consent.
The lawsuit follows on from a string of fines and legal action faced by the sports betting provider. In July, FanDuel was fined $2,000 and required to distribute more than $230,000 worth of wagers after accepting bets on a prerecorded fight. The operator’s founders were also embroiled in a years-long lawsuit against Paddy Power Betfair, claiming they were undervalued by $120 million during the company’s acquisition in 2018. However, FanDuel recently came out victorious in this case.
California’s Trap and Trace Law
The Trap and Trace Law exists to protect consumers from the unauthorized tracking of their online activity. However, the lawsuit alleges that whenever someone visits the FanDuel website, the software automatically sends their data to TikTok before they can express their cookie preferences, thereby directly violating the Trap and Trace Law.
“[Users] are never informed that the website is collaborating with the Chinese government to obtain their phone number and other identifying information,” states the lawsuit, as reported by Next.io.
Headed by lead plaintiff Courtney Mitchener and L.A.-based commercial litigation firm Tauler Smith LLP, the lawsuit seeks statutory damages and an injunction to cease FanDuel’s alleged privacy-violating practices.
A wider issue
The Flutter Entertainment-owned betting site is the latest in a string of companies being sued for using the controversial TikTok software. DraftKings, WebMD, United Healthcare, SmashBox Beauty, and Estee Lauder have also been accused of violating the Trap and Trace Law, while the Justice Department recently accused TikTok itself of violating online privacy laws.
Tauler Smith LLP, the firm representing Mitchener in the FanDuel case, has a proven track record with Trap and Trace-related lawsuits. In July, the firm represented a class of California consumers who filed a similar complaint against tutoring service C2 Educational Systems Inc. According to the lawsuit, C2 Educational Systems also uses TikTok’s “trap and trace” software and “fingerprinting” process to collect data about the website’s visitors.
About FanDuel
Founded in 2009 in Edinburgh, Scotland, FanDuel has continued to grow across the United States, now offering sports betting, horse racing, daily fantasy sports, and an online casino. The company is owned by Flutter Entertainment, the name behind gambling brands such as Betfair and PokerStars. FanDuel is the company’s primary U.S. brand, headquartered in New York City.
