Meta to settle Cambridge Analytica class-action lawsuit for $725m
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Facebook parent company Meta has agreed to pay $725m (£600m) to resolve a class-action lawsuit accusing the company of allowing third parties to harvest the personal data of millions of users.
The proposed settlement would resolve a four-year-long lawsuit prompted by revelations in 2018 that Facebook had allowed the now-defunct British political consulting firm Cambridge Analytica to access the data of as many as 87 million users.
The settlement - obtained by Reuters - has been detailed in a public court filing in the Northern District of California, four months after news first emerged of Meta's intention to settle the case.
"Plaintiffs respectfully request that the Court preliminarily approve the $725m non-reversionary Settlement," reads the document.
Lawyers for the plaintiffs called the proposed settlement the largest to ever be achieved in a US data privacy class action and the most that Meta has ever paid to resolve a class action lawsuit.
"This historic settlement will provide meaningful relief to the class in this complex and novel privacy case," the lead lawyers for the plaintiffs, Derek Loeser and Lesley Weaver added.
Despite the large size of the settlement, the settlement will see Meta admit no wrongdoings in the scandal.
The class-action lawsuit relates to a Facebook policy that allowed Cambridge Analytica to design an app that collected personal data from Facebook users, allowing the company to tailor specific political adverts to small groups of people.
This tool went on to play a key role in mapping out the behaviour of voters in the run-up to the 2016 US election and EU referendum campaign that resulted in the UK's exit from the bloc.
The data harvesting scandal that followed left Meta (then called Facebook) facing large-scale fines and settlements. The company eventually paid $5bn (£4.14bn) as part of a deal with the Federal Trade Commission (FTC), $100m (£82m) to the Securities and Exchange Commission (SEC) for misleading investors, and £500,000 to the UK Information Commissioner’s Office.
At the time, Facebook CEO Mark Zuckerberg also apologised for Facebook’s failure to prevent the scandal, after which time Facebook began to restrict third parties' access to user data.
Despite the many settlements that Meta reached, the company has been fighting a class-action lawsuit in the Northern District of California for the past four years and even argued that those who voluntarily signed up to the social network should have no real expectations of privacy.
These claims were dismissed by US District Judge Vince Chhabria. He rejected Facebook’s arguments that users suffered no “tangible” harm and had no legitimate privacy interest in the information they shared with friends on social media.
“Facebook’s motion to dismiss is littered with assumptions about the degree to which social media users can reasonably expect their personal information and communications to remain private,” Chhabria wrote in 2019. “Facebook’s view is so wrong.”
According to the plaintiffs' estimates, the total number of people represented in the lawsuit is "in the range of 250-280 million" people, which represents “all Facebook users in the United States during the Class Period, which runs from May 24, 2007 to December 22, 2022." The settlement applies to all of these users who, if they wish to apply, will only receive a few dollars each from the pot, according to the lawyers.
In a statement settling, Meta said the deal was "in the best interest of our community and shareholders."
"Over the last three years we revamped our approach to privacy and implemented a comprehensive privacy program," the company added.
The statement still has to be approved by the San Francisco court to which it was filed, with a hearing scheduled for next March.
Since the Cambridge Analytica scandal, Facebook has weathered numerous other scandals relating to its handling of user data; violent and manipulative content on its platforms; its allegedly deliberately addictive nature; potential antitrust violations; discriminatory ad targeting, and now-defunct digital currency venture, Libra.
In addition, the Cambridge Analytica scandal is still ongoing, as Washington, D.C. has sued Facebook founder Mark Zuckerberg, alleging that he was personally responsible for the failures that allowed the harvesting of users' data.
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