Facebook parent Meta to settle Cambridge Analytica class action lawsuit for $725 million

Facebook parent company Meta has agreed to a $725 million settlement to resolve a class action lawsuit related to the Cambridge Analytica data collection scandal.

First reported by Reuters earlier today, the settlement comes nearly four months after news first emerged that Meta had proposed a settlement in the Northern District of California, where the lawsuit was filed for the first time about four years ago. In the years that followed, Meta fought off the lawsuit, which consolidated complaints from multiple Facebook users, arguing that those who voluntarily signed up to the social network should have no real expectation of privacy — a claim that the judge handling the case in 2019 called it “so bad”.

The scandal in question – one of many to hit the Facebook world over the years – involves the now-defunct British political consultancy firm Cambridge Analytica which funneled the data of tens of millions of Facebook users through a survey app called MyDigitalLife, with a view to influencing voter behavior using targeted advertising. The ensuing privacy hubbub led to various fines and settlements, with Meta (then called Facebook) paying $5 billion in a settlement with the Federal Trade Commission (FTC), $100 million with the Securities and Exchange Commission (SEC) for misleading investors, and a modest £500,000 ($600,000) to the UK Information Commissioner’s Office.

It should also be noted that while the genesis of this class action was Cambridge Analytica, it has expanded to include other third parties who may have misused Facebook user data.

Facing the music

While Meta co-founder and CEO Mark Zuckerberg had previously testified to Congress about the scandal, his responses proved somewhat evasive and, aside from carefully vetted testimony before the European Parliament soon after, the Meta’s upper echelon did not have to deal with more direct events. questioning on the subject. However, with that trial looming, Zuckerberg, former COO Sheryl Sandberg and new COO Javier Olivan were all set to testify again at an upcoming hearing. This is something Meta clearly didn’t want, and it’s something that clearly won’t happen now that a tentative settlement has been reached.

In the filing informing the court of the proposed settlement, attorneys conclude that the settlement between the plaintiffs and Meta was an “extraordinary result,” resulting in the “largest recovery ever in a data privacy class action and the more Facebook has ever paid” to end a private class action lawsuit.

They wrote:

The amount of damages is particularly striking given that Facebook argued that its users consented to the practices at issue and that the group suffered no real harm. The plaintiffs dispute these characterizations, but acknowledge that they were at enormous risk in this new and complex case. In addition to the monetary relief obtained by the Plaintiffs, Facebook has significantly changed the practices that gave rise to the Plaintiffs’ allegations, as set forth in the statements of two Facebook employees with knowledge of these facts.

However, the $725 million settlement will see Meta once again admit no wrongdoing, saying in a statement released to Reuters that the settlement is “in the best interest of our community and our shareholders”. Additionally, the settlement applies to all Facebook users in the United States who, if they wish to apply, will only receive a few dollars each from the pot.

The settlement has yet to be approved, although that is expected at a follow-up hearing on March 2, 2023.

Meta hasn’t heard the latest from Cambridge Analytica however, with Washington, DC personally suing Zuckerberg, alleging he was personally responsible for the failures that led to the scandal.