An Austrian privacy activist cannot bring a class action lawsuit against Facebook for alleged privacy violations but can sue the company himself in his home country, the European Union's highest court has ruled.

The Court of Justice of the European Union said Max Schrems could bring a case against the US company and benefit from consumer law as an individual, but could not bring claims on behalf of the more than 25,000 signatories to his lawsuit.

"Mr Schrems may bring an individual action in Austria against Facebook Ireland," the court said in a statement, referring to Facebook's European headquarters.

"By contrast, as the assignee of other consumers claims, he cannot benefit from the consumer forum for the purposes of a collective action."

Mr Schrems had sought to claim €500 in damages for each of the signatories to his lawsuit, but Facebook argued the Austrian courts had no jurisdiction and that Mr Schrems could not benefit from consumer protection laws.

Facebook said Mr Schrems stopped being a consumer when he used a page for professional purposes. Under EU law, consumers are allowed to sue companies in their home country, as opposed to the one where the company is established.

"Today's decision by the European Court of Justice supports the previous decisions of two courts that Mr Schremss claims cannot proceed in Austrian courts as class action on behalf of other consumers," said a spokeswoman for Facebook.

Mr Schrems said the ruling was a "huge blow" for Facebook as his individual lawsuit against the company could go ahead in a Vienna court and Facebook would have to explain whether "its business model is in line with stringent European privacy laws".

While Austria recognises some forms of class action lawsuits, Ireland does not.