Owner of Facebook Meta has agreed to pay $725 million (£600 million) to resolve a lawsuit involving a data breach connected to the political consulting firm Cambridge Analytica.
In the ongoing battle,
Facebook was accused of granting access to user data to third parties, including the British company.
According to attorneys, the requested amount is the most in a US data privacy class action.
While denying wrongdoing, Meta claimed to have “revamped” its privacy policies in the previous three years.
The settlement was “in the best interest of our community and stockholders,” the firm claimed in a statement.
“We look forward to constructing services that consumers enjoy and trust while putting privacy first,” the statement reads.
James Ball, a tech author, told the BBC that although Meta had to consent to a significant payout, it was “not that much” money for the software giant.
It’s less than a tenth of what it spent just last year on attempts to build “the metaverse,” he claimed.
Therefore, Meta probably won’t be too dissatisfied with this agreement, but it does serve as a caution to social networking businesses that errors may be extremely expensive.
The proposed settlement
must be approved by a federal judge in San Francisco and was revealed in a court filing late on Thursday.
Lead plaintiffs’ attorneys Derek Loeser and Lesley Weaver stated in a statement that “this historic settlement will provide real relief to the class in this complicated and innovative privacy matter.”
A significant proposed class of Facebook users whose personal information on the social network was unintentionally disclosed to third parties filed the action on their behalf.
According to the decision document, the class size is “in the range of 250-280 million,” and it represents all Facebook users in the US between 24 May 2007 and 22 December 2022.
The plaintiffs’ method of receiving their portion of the settlement is unclear.
If each person chose to file a claim, Janis Wong, a privacy and ethical researcher at The Alan Turing Institute, estimated that the cost would only be $2–$3 per person.
The settlement will be the subject of another hearing on March 2, 2023.
Even while the $725 million settlement excludes UK users, a competition law expert earlier this year proposed a multi-billion dollar class action lawsuit against Meta involving the misuse of user data that does include the Cambridge Analytica period.
In the coming year, the UK Competition Appeal Tribunal should provide additional information on that, she told the BBC.
The privacy issue
involving Cambridge Analytica, which was made public in 2018, was centered on the collection of Facebook users’ personal data by outside apps.
The now-defunct consultancy firm supported Donald Trump’s electoral victory in 2016 by using the personal data from millions of US Facebook accounts for voter profiling and targeting.
The firm obtained that information without users’ consent from a researcher who had been allowed by Facebook to deploy an app on the platform which harvested data from millions of its users.
Facebook believes that the political consultant was inappropriately given access to the data of up to 87 million people.
Government inquiries into Facebook’s privacy policies were spurred by the incident, and this resulted in lawsuits and a prominent US congressional hearing when Meta head Mark Zuckerberg was questioned.
In order to end a Federal Trade Commission investigation into its privacy practices, Facebook agreed to pay $5 billion in 2019.
Additionally, the internet giant forked over $100 million to settle charges made by the US Securities and Exchange Commission that it had deceived investors about the misuse of customer data.
The corporation is contesting a legal action brought by the attorney general of Washington, DC, and state attorneys general are still conducting investigations.
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