Facebook Parent Meta Will Settle Cambridge Analytica Class Action for $725 million

Facebook parent company Meta Platforms, Inc. recently agreed to pay $725 million in order to resolve a class-action lawsuit accusing it of illegally allowing third parties, including Cambridge Analytica, access to its users' personal information.

The now defunct Cambridge Analytica worked for Donald Trump's successful 2016 presidential campaign and obtained personal information from as many as 87 million Facebook accounts without the users’ consent from a researcher who had been allowed by Facebook to deploy an app on its social media network that harvested data from its users. Cambridge Analytica then used this data for the purposes of voter profiling and targeting.

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The revelation of these details in 2018 led to a scandal which prompted government investigations into Facebook’s privacy practices, several lawsuits, and Meta CEO Mark Zuckerberg being interrogated by lawmakers in a high-profile congressional hearing.

The proposed settlement is the largest ever in a U.S. data privacy class action and the most Meta has ever had to pay to resolve a class action.

Meta did not admit wrongdoing and said in a statement that settling 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," Meta’s statement continued.

This is far from the first time Facebook or Meta has agreed to shell out a substantial amount to settle privacy claims. In 2019 alone, Facebook agreed to pay $5 billion to resolve a Federal Trade Commission (FTC) probe into its privacy practices and another $100 million to settle U.S. Securities and Exchange Commission (SEC) claims that it misled investors about the misuse of users' data.

In this most recent case, lawyers for the plaintiffs alleged that Facebook had misled its users into thinking they could maintain control of their personal data, when in fact it was letting thousands of preferred outsiders gain access to that data.

Facebook, for its part, argued that its users have no legitimate privacy interest in information they share with friends on social media.

U.S. District Judge Vince Chhabria of the United States District Court for the Northern District of California did not take kindly to that argument, calling the view "so wrong" in 2019 and largely allowing the case to move forward.

The $725 million settlement covers roughly 250 to 280 million Facebook users, and lawyers for the plaintiffs say they plan to ask the judge for up to 25% of that amount as attorneys' fees, or about $181 million.