Meta Platforms has agreed to pay a record $725 million to settle a class-action lawsuit brought by Facebook users who alleged that the company allowed third parties to access their personal data.
The UK research firm Cambridge Analytica, whose clients included former president Donald Trump, was the most prominent example of what the complaint described as a broad-scale privacy lapse. In 2018, it was revealed that Cambridge Analytica gained improper access to the personal information of some 87 million Facebook accounts.
The case was filed U.S. District Court in the Northern District of California in San Francisco. Judge Vince Chhabria must approve the settlement.
The case was an embarrassing episode for Facebook and its founder, Mark Zuckerberg, who was brought before Congress to answer questions about data security. It followed more than a year of intense media coverage of how Trump used social media (with an assist from Russia) to upset Hillary Clinton in the 2016 election. Some advertisers withdrew from Facebook amid the Cambridge Analytica controversy.
“After more than four years of intensive litigation, the Named Plaintiffs have achieved an
extraordinary outcome on behalf of the Class. The proposed Settlement … is the
largest recovery ever achieved in a data privacy class action and the most Facebook has ever paid
to resolve a private class action,” wrote attorneys for the plaintiffs in their motion to certify the settlement.
“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.”
Mainly, the company has stopped allowing third parties to access data about users through their friends; has meaningfully enhanced its ability to restrict and monitor how third parties acquire and use Facebook users’ information; and has developed more robust tools to tell users what information Facebook collects and shares about them.
Meta did not admit wrongdoing as part of the settlement. A rep wasn’t immediately available to comment. “We pursued a settlement as it’s 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,” a Meta spokesperson told CNBC.
Facebook changed its name to Meta in Oct. of 2021.
Jill Goldsmith contributed to this story