NERA Director Dominik Huebler and former colleague Claudia Beckmann published an article on quantum and class certification in privacy disputes in the peer-reviewed Mass Claims Journal. Drawing on NERA’s recent work in data and privacy breach disputes (e.g., here), they review the approaches to damages valuation taken in recent decisions by Europe’s and Germany’s top courts. The authors find the European Court of Justice (ECJ) ruling that there is no “seriousness threshold” for claims and the German Federal Supreme Court (BGH) confirmation that the mere loss of control of data can constitute a compensable event increases the likelihood of mass claims against companies accused of committing data breaches.

The authors therefore outline an evidence-based framework for class certification and the economic assessment of damages. In particular, the authors provide a practical guide to using survey-based conjoint analysis. Conjoint analysis is a method commonly used in market research and competition economics to assess the value of individual product attributes (such as the strength of privacy protection). The authors show such techniques can be used to assess commonality of injury (from a data breach) and explore the use of the concept for questions of class certification given that the economic literature shows valuation of privacy is often context specific. The article therefore provides courts with a tool to assess the issue of commonality of valuation based on empirical evidence.

Given that both top courts delegated the task of determining damages to the lower courts, the article also expands upon earlier NERA work on damages estimation (e.g., here): The authors analyze different market and individual valuation-based measures and assess their suitability for use in data privacy valuation cases. In doing so, they provide courts with an introduction to the economic literature on the value of privacy and a range of options for quantifying these and assessing the viability of party estimates of harm.