By Shadia Nasralla
VIENNA (Reuters) - An Austrian student's legal battle against Facebook (NASDAQ:FB), accusing it of helping the U.S. security service collect personal data, suffered a setback after a Vienna court rejected his case on procedural grounds, both sides said on Wednesday.
The social media giant hailed the ruling, saying it showed the class-action lawsuit had been unnecessary and defending its record on guarding customers' privacy.
But 27-year-old Max Schrems said he would appeal against the decision and keep going, as the court had not killed off the case entirely, but referred it on to a higher tribunal.
The law student is claiming 500 euros ($556) in damages for each of more than 25,000 signatories to his lawsuit - the latest in a series of European challenges to U.S. technology firms and their handling of personal data.
Facebook's lawyer presented a long list of procedural objections to the Vienna court in April, questioning Schrems'
status as a private Facebook consumer and whether the 25,000 plaintiffs were legally allowed to confer their rights on him.
The court rejected the suit on Monday, saying Schrems had not used Facebook merely as a private consumer but also for commercial promotions of his publications, a court spokeswoman said, adding a higher Austrian court might decide differently.
"This finding by the court is really very strange. Unfortunately it seems like the court wanted to forward this hot potato to the higher courts," Schrems' lawyer, Wolfram Proksch, said in a statement.
Schrems accuses Facebook of helping the U.S. National Security Agency mine customers' personal data. He told Reuters he only got details of the ruling late on Tuesday.
"This litigation was unnecessary and we're pleased that the court has roundly rejected these claims," a spokesman for Facebook said. "We remain happy to work with our regulator, the Irish Data Protection Commissioner, to address any questions about our commitment to protecting people's information."
Facebook's European headquarters is in Ireland.
European politicians have grown increasingly concerned about the domination of the Internet industry by Facebook, Google (NASDAQ:GOOGL) and other U.S. companies, and have sought ways to curb their power.
Schrems also has a case pending at the European Court of Justice financed by crowdsourcing, which mainly relates to the so-called Safe Harbor agreement governing data transfers from Europe to the United States.
($1 = 0.8989 euros)
(additional reporting by Erich Auchard in Frankfurt; Editing by Thomas Atkins and Andrew Heavens) OLUSINT Reuters US Online Report Internet News 20150701T091830+0000