The Bottom Line
- A New Procedural Shield: This ruling provides a powerful early-stage defense for companies facing collective action lawsuits in the Netherlands. Challenging a claimant organization’s standing and representativeness is now a proven, potent strategy.
- Higher Hurdles for “Claim Factories”: Claimant foundations must now meet a higher standard to prove they genuinely represent the large group of individuals on whose behalf they are suing. A website and a modest number of supporters may no longer be enough to get a case off the ground.
- Core Data Risks Remain: The court dismissed the case on procedural grounds and did not rule on the legality of the underlying data processing. The business and compliance risks associated with ad-tech, cookies, and real-time bidding have not disappeared.
The Details
This case involved a collective action brought by the foundation The Privacy Collective against Oracle and Salesforce. The foundation alleged that the two tech giants had unlawfully processed the personal data of millions of Dutch internet users through their respective ad-tech services, which utilize third-party cookies and real-time bidding for targeted advertising. The foundation sought a declaratory judgment that these practices were illegal, a crucial first step in a mass damages claim. However, the court never reached the substance of these privacy allegations.
The court dismissed the entire case on admissibility grounds, a significant procedural victory for the defendants. The judgment hinged on the strict requirements of the Dutch Act on the Settlement of Mass Damages in Collective Actions (WAMCA). The court found that The Privacy Collective could not sufficiently prove that it represented the interests of the vast and vaguely defined group it claimed to act for—namely, “millions of Dutch internet users.” The court determined the foundation’s actual support base was too small and lacked the substantial connection required to justify such a sweeping claim.
This decision serves as a critical warning to would-be claimants and a sigh of relief for potential defendants. It reinforces that the WAMCA’s gatekeeping function is robust, designed to prevent speculative litigation by “claim factories” that lack a genuine mandate from the people they purport to represent. For businesses, this means that the first line of defense in any future collective action will be to rigorously scrutinize the claimant’s standing. For claimant groups, it means the hard work of building a demonstrable and engaged constituency must be done long before they ever step into a courtroom.
Source: District Court of The Hague
