An US court has rejected Facebook's challenge to quash the search warrants ordering it to hand over information of hundreds of accounts involved with a disability fraud case related to the 9/11 attacks.

According to a report in New York Times on Tuesday, the Court of Appeals here upheld a lower court ruling that said Facebook lacked standing to challenge search warrants in a criminal case on behalf of its clients.

The case dates back to 2013 when search warrants for information on 381 Facebook accounts were issued as part of an investigation into the fraud case.

"The information, which included photos and conversations, was used by the Manhattan District Attorney to obtain indictments for disability fraud against more than 130 people," the report said.

These included retired police officers and other former public employees accused of feigning illness after the September 11, 2001 terrorist attack on the World Trade Centre," it noted.

The new ruling is yet another challenge for social media networks who hope to enhance the privacy protections for its users.

Thus, Microsoft, Google and Twitter and other groups like New York Civil Liberties Union and the Electronic Frontier Foundation have decided to stand by Facebook's appeal.

"We're disappointed by the court's ruling. But we are encouraged to see the thorough dissent that supports Facebook's position arguing for people's online privacy," the report quoted Jay Nancarrow, a spokesman for Facebook.

Nancarrow added that the company has not decided yet whether to take its case to the federal courts.

The case is seen as a fragment of the fight between the state and the tech companies over the law enforcement that request for the data under the Federal Stored Communications Act.