Meta agrees to settle Cambridge Analytica lawsuit for a record $725 million

Meta agrees to settle Cambridge Analytica lawsuit for a record $725 million

Dec 23, 2022 - 23:30
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Meta agrees to settle Cambridge Analytica lawsuit for a record $725 million

2022 wasn’t a great year for Mark Zuckerberg-led Meta, formerly known as Facebook. In a year which saw them lose some of the platform’s most avid advertisers, as well as an abysmal failure of their star Metaverse project, Horizon Worlds, Meta will now have to pay a record $725 million to settle the class-action lawsuit related to the Cambridge Analytica data harvesting scandal.

Meta agrees to settle Cambridge Analytica lawsuit for a record $725 million

The agreement, which was originally reported by Reuters earlier today, comes after news broke about four months ago that Meta had put up a settlement proposal in the Northern District of California, where the lawsuit was initially brought over four years ago. 

In the following years, Meta has resisted the lawsuit, which combined grievances from other Facebook users, claiming that people who freely joined the social network should have no legitimate expectations of privacy. The judge supervising the case in 2019 termed this argument “so wrong.”

The scandal in question, which is just one of many to have rocked the Facebook world over the years, involves the now-defunct U.K. political consulting firm Cambridge Analytica, which used a survey app called MyDigitalLife to collect data from tens of millions of Facebook users with the intention of using that data to influence voting behaviour through targeted advertisements. Following the privacy controversy, several fines and settlements were reached. 

Meta agreed to pay the Federal Trade Commission (FTC) $5 billion as part of a settlement, the Securities and Exchange Commission (SEC) $100 million for deceiving investors, and the U.K. Information Commissioner’s Office a meagre £500,000 ($600,000).

Although the Cambridge Analytica scandal what set of this class-action lawsuit, it has now been broadened to include other third parties that may have misused Facebook user data.

Mark Zuckerberg, the CEO and co-founder of Meta, had previously testified before Congress about the scandal, but his answers were a little evasive, and aside from a carefully controlled testimony before the EU Parliament shortly after, the upper echelon at Meta have not had to face any more direct questioning on the matter. 

However, because of this pending case, Zuckerberg, Sheryl Sandberg, the current COO, and Javier Olivan, the previous COO, were all scheduled to appear again in court. It’s obvious that Meta didn’t want this to happen, and that it won’t now that an agreement has been struck.

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.

While acknowledging no wrongdoing once more as part of the $725 million settlement, Meta said in a statement provided to Reuters that the agreement was “in the best interest of our community and shareholders.” Additionally, the settlement covers every American Facebook user, who will only get a small portion of the settlement fund, if they want to apply.

The settlement has not yet received final approval, although this is anticipated at a subsequent hearing on March 2, 2023.

Washington, D.C. is suing Zuckerberg personally, claiming that he was directly accountable for the mistakes that led to the scandal, so Meta hasn’t heard the last of Cambridge Analytica.

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