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.
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. Meta has pushed back against the lawsuit in the intervening years, which isn’t surprising considering that the case consolidated complaints from multiple Facebook users.
If you recall, the scandal in question relates to the now-defunct U.K. political consulting firm Cambridge Analytica, which funneled data from tens of millions of Facebook users through a survey app called MyDigitalLife — to influence voters’ behavior use targeted ads. The privacy cases that followed led to various fines and settlements, with 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 relatively modest £500,000 ($600,000) to the U.K. Information Commissioner’s Office.
Also worth adding is that while the genesis of this class-action lawsuit was Cambridge Analytica, it expanded to include other third parties that may have also improperly used Facebook user data.
In the filing notifying the court of the proposed settlement, the lawyers say 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.
In a statement issued to Reuters, Meta says that the settlement was “in the best interest of our community and shareholders.”
The settlement is expected to be rubber-stamped at a follow-on hearing on March 2, 2023.
I guess this is the end of a chapter, but chances are – we’ll be hearing more on the Facebook privacy front in the coming years. Which is unfortunate but also how things work when we, as end-users, are effectively turned into products.