NFT Firm Dapper Labs Files Answer in NBA Top Shot Privacy Lawsuit, Denies Key Allegations
On Friday, April 19, 2024, Dapper Labs, one of the premier non-fungible token (NFT) companies, filed its answer to a second amended complaint in federal court in San Francisco.
Dapper Labs is best known as the creator of NBA Top Shot, a popular platform for buying and trading video highlights of NBA games as NFTs. NBA Properties is also named as a defendant in the lawsuit. Thomas Fan filed the class action suit against the two companies last October, alleging violations of the Video Privacy Protection Act.
In its 45-page filing, Dapper Labs denied the key allegations made by Fan. The company argued that NBA Top Shot moments are not video clips as Fan claims. It also denied that NBA Top Shot constitutes an unincorporated joint venture between Dapper and NBA Properties.
With regards to the technical aspects of the platform, Dapper Labs admitted NBA Top Shot moments are recorded on the Flow blockchain, a public ledger that allows anyone to verify ownership of NFTs. However, it denied Fan’s claim that Flow is a private blockchain run solely by Dapper.
A central issue in the case involves the use of Meta Pixel, a tracking tool that can associate online activities with a Facebook profile. Fan contends Meta Pixel is placed by Dapper Labs on its website without consent to share viewers’ watching data with Facebook.
While Dapper Labs acknowledged using Meta Pixel on some site pages, it denied disclosing any user information to Facebook. The company said it lacks knowledge about Meta’s internal practices. Fan’s legal team provided screenshots they claim show Meta Pixel functioned to share data like username and NFT purchase details.
If the case proceeds as a class action, it could have significant implications for the burgeoning NFT market. Companies selling digital collectibles typically do not identify buyers by their legal names. But Fan argues this practice contravenes the Video Privacy Protection Act, which aims to keep viewing data private.
It remains to be seen how the court will view these complex issues involving the intersection of privacy law and new technologies like cryptocurrencies and NFTs.
Please contact BlockTribune for access to a copy of this filing.
