(Updates with comment from Shopify in the third and fourth paragraphs.)

Shopify (SHOP) is facing a potential data privacy class action suit after a US appeals court said the company can be sued in California, reversing an earlier court decision that dismissed the case for lack of personal jurisdiction, according to a Monday court document.

A California plaintiff sued the company, alleging that Shopify installed "cookies" that tracked his online shopping activity without his consent and marketed the data to California merchants. The 9th US Circuit Court of Appeals in San Francisco reversed the dismissal of this case, saying the "jurisdiction is proper."

"This ruling attacks the basics of how the internet works. Left unchallenged, it drags entrepreneurs who run online businesses into distant courtrooms regardless of where they actually operate," a Shopify spokesperson told MT Newswires via email.

"It's bad for entrepreneurs, ignores 30 years of established law, and conflicts with rulings from other circuit courts. We'll keep fighting for small businesses and what they need to succeed," the spokesperson said.

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