Trap and Trace Lawsuits: The Hidden Compliance Risk for eCommerce Sites
For years, "cookie banners" were considered a best practice for online compliance. Today, they're no longer enough. A new wave of privacy litigation, Trap and Trace lawsuits, is reshaping the risk landscape for eCommerce businesses.
These lawsuits target websites for allegedly "wiretapping" visitors through common tracking technologies like cookies, pixels, and session replay scripts. What once seemed like standard marketing tools are now being recast by plaintiffs' lawyers as unlawful surveillance.
The volume of these cases is exploding, driven by automated scanning tools and aggressive law firms looking for quick settlements. For Shopify stores, DTC brands, and enterprise retailers alike, understanding Trap and Trace lawsuits is now a compliance priority.
Understanding Trap and Trace Devices and Lawsuits
Definition and Functions
In privacy law, a "trap and trace" device refers to technology that captures information about the origin and destination of electronic communications. In the cybersecurity world, it's more commonly associated with tools that log network traffic for monitoring or investigative purposes.
The legal definition, however, is broad enough that plaintiffs are using it to describe website scripts that capture data about visitors, everything from mouse movements to chat transcripts.
Differences Between Pen Registers and Trap and Trace Devices
- Pen registers: Record outgoing signals or communications.
- Trap and trace devices: Record incoming communications.
In litigation, these concepts are being stretched to cover routine website tracking, something most merchants never imagined could qualify as a "wiretap."
The Legal Framework
California Invasion of Privacy Act (CIPA) Section 638.51
California is ground zero for Trap and Trace lawsuits. Under state law, "a person may not install or use a pen register or a trap and trace device without first obtaining a court order" as outlined in Section 638.51 of the California Penal Code↗.
Plaintiffs' lawyers are leveraging this statute to argue that pixels, cookies, and session replay tools fall under this category.
Other State Laws at Play
California is not alone. Similar lawsuits have appeared in Pennsylvania, Illinois, and Florida, where broad privacy statutes are being reinterpreted to apply to digital tracking.
While each law differs, the theme is the same: online businesses are accused of unlawfully intercepting user communications.
Reinterpreting "Wiretap" Statutes for Websites
Historically, wiretap laws applied to phone lines. Now, plaintiffs argue that website tracking constitutes real-time interception of electronic communications. Courts are divided, some agree with the expansive interpretation, while others have pushed back.
Recent Litigation Trends in California and Beyond
Surge of Website Tracking Lawsuits
Law firms are deploying automated scanners to detect tracking scripts across thousands of websites. Once flagged, businesses receive demand letters threatening litigation unless a settlement is reached. Some escalate into class actions, amplifying the potential damages.
As K&L Gates reports↗, plaintiffs now routinely target pixels, session replay tools, and even chat widgets as alleged trap and trace devices.
Key Cases and Precedents
- Licea v. Hickory Farms: Alleged unlawful use of session replay technology to capture browsing behavior.
- Moody v. C2 Enterprises: cited by privacy litigators as a model case for "trap and trace" claims.
The American Bar Association↗ has noted that outcomes are mixed, some courts accept plaintiffs' expansive theories while others reject them outright.
Pushback from Courts
Some judges have started to reject expansive interpretations, questioning whether ordinary web tracking truly qualifies as illegal surveillance. The Association of Corporate Counsel↗ highlights how recent rulings may offer reprieve for businesses, but uncertainty remains.
Common Allegations in Trap and Trace Complaints
- Unauthorized cookie drops before consent: Tracking begins as soon as the page loads, not after opt-in.
- Pixels and beacons transmitting user data: Tools like Meta Pixel or TikTok Pixel send browsing behavior to third parties.
- Session replay and chat widgets: Treated as "wiretaps" because they capture the full substance of user communications.
The Risk Landscape for eCommerce Leaders
Multi-State and Federal Exposure
Although CIPA is leading the charge, similar arguments are being tested across multiple jurisdictions. A single website with national reach may face lawsuits in several states simultaneously.
Financial and Reputational Damage
CIPA provides statutory damages of $5,000 per violation. For high-traffic eCommerce sites, the math is staggering. Beyond financial exposure, headlines about privacy lawsuits erode consumer trust, which is often harder to rebuild than balance sheets.
Why Cookie Banners Aren't Enough
Too many businesses rely on decorative cookie banners, pop-ups that look compliant but don't actually block trackers until consent is given. Courts are increasingly skeptical of these practices.
Effective compliance requires:
- Geolocation controls: Serving region-specific consent flows.
- Opt-in by default: No trackers should fire until explicit consent is captured.
- Withdrawal of consent: Users must have the ability to revoke consent as easily as they gave it.
In short, banners without enforcement mechanisms offer little real protection.
Compliance and Risk Mitigation Strategies
Consent Management and Transparency
Deploy a robust consent management platform that blocks trackers until opt-in consent is captured. Provide layered notices so users can easily understand what's being collected and why.
Data Minimization and Vendor Evaluation
Audit your tech stack and remove unnecessary tracking tools. Every third-party script adds legal risk, evaluate vendors carefully for compliance practices.
Audit and Documentation
Maintain detailed records of your data collection practices. In litigation, documentation is your first line of defense.
Legal Preparation
Work with privacy counsel to develop response protocols for demand letters and litigation. Have a plan in place before you need it.
Industry-Specific Considerations
For Shopify Merchants
Shopify's ecosystem includes dozens of apps that may install tracking scripts without your knowledge. Regularly audit your app permissions and understand what data each tool collects.
For Enterprise Retailers
Large retailers face higher exposure due to traffic volume and complex tech stacks. Consider implementing enterprise-grade consent management solutions and conducting regular third-party risk assessments.
For DTC Brands
Direct-to-consumer brands often rely heavily on marketing attribution tools, many of which are now litigation targets. Balance growth metrics with compliance risk.
The Technology Behind the Lawsuits
Session Replay Tools
Platforms like FullStory, Hotjar, and LogRocket record user sessions, capturing everything from clicks to form inputs. Plaintiffs argue these constitute unlawful wiretapping.
Marketing Pixels
Meta Pixel, TikTok Pixel, and Google Analytics transmit user behavior to third parties. Without proper consent, these may violate trap and trace statutes.
Chat Widgets and Customer Service Tools
Live chat platforms like Intercom or Zendesk Chat capture conversations in real-time. Courts are treating these as potential wiretaps when deployed without consent.
Building a Privacy-First eCommerce Strategy
Privacy by Design Principles
Build privacy considerations into your technology decisions from the start. Choose vendors that support granular consent controls and data minimization.
Customer Communication
Be transparent about your data practices. Clear communication builds trust and can serve as evidence of good faith compliance efforts.
Regular Compliance Reviews
Privacy law is evolving rapidly. Schedule quarterly reviews of your compliance posture and adjust as needed.
What This Means for Your Business
Trap and Trace lawsuits represent a fundamental shift in privacy litigation. What was once considered standard practice is now potential legal liability. The question isn't whether your business will face scrutiny, but when.
The businesses that will thrive are those that get ahead of the curve, implementing robust privacy controls not just for compliance, but as a competitive advantage. Privacy-conscious consumers increasingly reward brands that respect their data rights.
Next Steps: Building Your Defense
- Conduct a Privacy Audit: Identify all tracking technologies on your site and assess their compliance risk.
- Implement Proper Consent Management: Deploy a solution that actually blocks trackers until consent is given.
- Review Vendor Contracts: Ensure your technology partners provide adequate compliance support.
- Develop Response Protocols: Have a plan for handling demand letters and litigation.
- Stay Informed: Privacy law is evolving rapidly. Regular updates are essential.
The era of "set it and forget it" privacy compliance is over. Trap and Trace lawsuits are forcing eCommerce businesses to take privacy seriously, not just as a legal obligation, but as a core business practice.
For merchants ready to take action, the path forward is clear: implement robust privacy controls, maintain transparency with customers, and build compliance into your business operations from the ground up.
Looking for expert guidance on privacy compliance? PieEye↗ offers comprehensive solutions designed specifically for eCommerce businesses navigating the complex world of privacy law.