Facebook’s parent company Meta has agreed to a $725 million settlement to resolve a class action lawsuit related to the Cambridge Analytica data harvesting scandal.
First reported by Reuters earlier today, the deal follows nearly four months after news first emerged that Meta had proposed a settlement in the Northern District of California where the suit was first filed some four years ago. In the intervening years, Meta has pushed back against the lawsuit, which consolidated complaints from multiple Facebook users, arguing that those who voluntarily signed up to the social network should have no real expectations of privacy — an assertion that the judge overseeing the case in 2019 called “so wrong.”
The scandal in question — one of many to hit the world of Facebook through the years — relates to the now-defunct U.K. political consulting firm Cambridge Analytica that funneled data from tens of millions of Facebook users through a survey app called MyDigitalLife, with a view toward influencing voters’ behavior using targeted ads. The privacy brouhaha that followed led to various fines and settlements, with Meta (then called Facebook) paying $5 billion as part of a deal with the Federal Trade Commission (FTC), $100 million to the Securities and Exchange Commission (SEC) for misleading investors and a modest £500,000 ($600,000) to the U.K. Information Commissioner’s Office.
It’s also worth noting that while the genesis of this class action lawsuit was Cambridge Analytica, it expanded to include other third-parties that may have improperly used Facebook user data.
Facing the music
While Meta co-founder and CEO Mark Zuckerberg had previously testified before Congress about the scandal, his responses proved somewhat evasive and aside from a carefully controlled testimony in front of the EU Parliament shortly after, those in the upper echelon at Meta have not had to face any more direct questioning on the matter. However, with this impending lawsuit, Zuckerberg, former COO Sheryl Sandberg and new COO Javier Olivan were all set to testify again at an upcoming hearing. This is something that Meta clearly didn’t want, and it’s something that clearly won’t happen now that a provisional settlement has been reached.
In the filing notifying the court of the proposed settlement, the lawyers conclude that the deal agreed between the plaintiffs and Meta was an “extraordinary outcome,” resulting in the “largest recovery ever achieved in a data privacy class-action and the most Facebook has ever paid” to end a private class action lawsuit.
The amount of the recovery is particularly striking given that Facebook argued that its users consented to the practices at issue, and that the class suffered no actual damages. Plaintiffs dispute these characterizations, but acknowledge that they faced tremendous risks in this novel and complex case. In addition to the monetary relief obtained by Plaintiffs, Facebook has meaningfully changed the practices that gave rise to Plaintiffs’ allegations, as set forth in the declarations of two Facebook employees with knowledge of those facts.
However, the $725 million settlement will see Meta once again admit no wrongdoing, saying in a statement issued to Reuters that the settlement was “in the best interest of our community and shareholders.” Moreover, the settlement applies to every Facebook user in the U.S. who, if they wish to apply, will only receive a few dollars each from the pot.
The settlement has yet to be rubberstamped, though this is expected at a follow-on hearing on March 2, 2023.
Meta hasn’t heard the last of Cambridge Analytica though, with Washington, D.C. suing Zuckerberg personally, alleging that he was personally responsible for the failures leading to the scandal.