Meta-investors call for reviving Cambridge Analytica fraud case

Meta Platforms investors have formally asked a US appeals court to revive a proposed class action lawsuit accusing the Facebook parent of covering up a serious privacy breach that allowed a political consulting firm to harvest people’s personal information. users.

The request came during oral arguments on Wednesday before the 9th US Circuit Court of Appeals in San Francisco over the Cambridge Analytica scandal, where data from up to 87 million users was accessed.

Investors claimed that Facebook, as the company was known, misled them in 2016 by portraying data breaches as merely a “risk”, when it knew Cambridge had accessed user data.

Investors said they suffered losses in July 2018 when Facebook’s share price fell after the company said user growth slowed after the scale of the breach became public knowledge.

US District Judge Edward Davila ruled in 2020 that Facebook’s claims were not untrue because Cambridge’s use of the data made headlines in 2015.

At Wednesday’s hearing, investors’ attorney Tom Goldstein told a three-judge panel that Davila’s decision should be overturned because Facebook downplayed the information and failed to take strong action.

Meta’s attorney, Joshua Lipshutz, countered that the company had correctly disclosed that cyberattacks had happened and would happen in the future.

Circuit Judges Margaret McKeown and Jay Bybee sounded skeptical, calling the disclosures “boilerplate” and suggesting they might not be meaningful to investors.

“If they have a phishing incident by an 18-year-old sitting in his parents’ basement, it’s true,” Bybee said. “But that’s not helpful given the nature of the flight to Cambridge.”

Lipshutz replied that even if there were inaccuracies, investors still have to show that Meta had an unlawful intent.

“It’s not plausible that the company tried to mislead the public about something the public already knew,” he said.

Facebook has paid over $5 billion (nearly Rs 41,270 crore) in fines to US authorities for Cambridge Analytica. He agreed to pay $725 million (nearly Rs. 6,000 crore) to settle a lawsuit filed by Facebook users in December.

© Thomson Reuters 2023