Meta, the father of Facebook, pays $725 million in Cambridge Analytica scandal

The proposed settlement is the largest in a US data privacy class litigation and the most paid by Meta to resolve a class action lawsuit.

Facebook owner Meta Platforms Inc has agreed to pay $725 million to resolve a class action lawsuit accusing the social media giant of allowing third parties, including Cambridge Analytica, to access users’ personal information.

The proposed settlement, disclosed in a court filing late Thursday, would resolve a long-running lawsuit sparked by revelations in 2018 that Facebook allowed British political consulting firm Cambridge Analytica access to the data of up to 87 million users.

Attorneys for the plaintiffs described the proposed settlement as the largest settlement ever achieved in a US data privacy class action lawsuit and the largest amount Meta has ever paid to resolve a class action lawsuit.

“This historic settlement will provide meaningful relief to adjudicating this complex and new privacy issue,” lead attorneys for the plaintiffs, Derek Loesser and Leslie Weaver, said in a joint statement.

Meta did not admit wrongdoing as part of the settlement, which is subject to approval by a federal judge in San Francisco. The company said in a statement that the settlement is “in the best interest of our community and our shareholders.”

“Over the past three years, we have revamped our approach to privacy and implemented a comprehensive privacy program,” Meta said.

Cambridge Analytica, now defunct, worked on former President Donald Trump’s successful presidential campaign in 2016 and gained access to personal information from millions of Facebook accounts for voter profiling and marketing purposes.

Cambridge Analytica obtained this information without users’ consent from a researcher who was allowed by Facebook to publish an app on its social network that collected data from millions of users.

The ensuing Cambridge Analytica scandal prompted government investigations into privacy practices, lawsuits and a high-profile hearing in the US Congress where lawmakers questioned Meta CEO Mark Zuckerberg.

‘that’s wrong’

In 2019, Facebook agreed to pay $5 billion to resolve a Federal Trade Commission investigation into its privacy practices and $100 million to settle allegations by the US Securities and Exchange Commission that it misled investors about the misuse of users’ data.

Investigations by state attorneys general are ongoing, and the company is fighting a lawsuit by the Washington, D.C. attorney general.

Thursday’s settlement resolved allegations by Facebook users that the company violated numerous federal and state laws by allowing app developers and business partners to massively harvest their personal data without their consent.

Lawyers for the users alleged that Facebook misled them into thinking they could control personal data, when in fact it was allowing thousands of preferred outsiders access.

Facebook said its users have no legitimate privacy concern in the information they share with friends on social media. But US District Judge Vince Chhabria called that view “deeply wrong” and in 2019 largely allowed the case to move forward.

The settlement covers an estimated 250 to 280 million Facebook users, according to a court filing Thursday. The amount an individual user receives depends on how many people submit valid claims for a share of the settlement.

Lawyers for the plaintiffs say they plan to ask the judge to award them up to 25 percent of the settlement as attorneys’ fees, the equivalent of about $181 million.

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