Schrems is suing Facebook's Irish division in an Austrian court for various alleged rights violations including tracking of user data and involvement in the US National Security Agency's PRISM surveillance programme.
He had also lodged cases on behalf of seven other Facebook users in Austria, Germany and India.
Facebook had challenged the jurisdiction of the Austrian courts in the case, and argued that Schrems's professional activities on his account meant he was no longer a private consumer.
The advocate general to the European Court of Justice said in a legal opinion that Schrems "may be able to rely on his consumer status in order to sue Facebook Ireland before the Austrian courts."
"However, Schrems cannot rely on his consumer status with respect to claims assigned to him by other consumers."
The EU advocate general's legal opinions are often, but not always, followed by the the ECJ's judges in their final decision.
Austria's Supreme Court had referred the matter to the ECJ after Schrems's lawsuit was first thrown out and then restored by the country's courts.
Facebook welcomed the findings on the collective lawsuit.
"Today's opinion supports the decisions of two courts that Mr Schrems's claims cannot proceed as 'class action' on behalf of other consumers in Austrian courts," a Facebook spokesman said in a statement to AFP.
Schrems is also suing Ireland's data protection regulator over the transfer of personal information by Facebook from Europe to the United States in a separate case being considered by the ECJ.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)