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.
“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 dissatisfy with this agreement, but it does warn social networking businesses that errors may be extremely expensive.
The proposed settlement must be approve by a federal judge in San Francisco and was reveal in a court filing late on Thursday.
Lead plaintiffs’ attorneys Derek Loeser and Lesley Weaver stated that “this historic settlement will provide real relief to the class in this complicated and innovative privacy matter.”
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 May 24, 2007, and December 22, 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 though 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, including the Cambridge Analytica period.
The UK Competition Appeal Tribunal should provide additional information in the coming year. She told the BBC.
The privacy issue involving Cambridge Analytica, made public in 2018, was center on collecting Facebook users’ 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 company acquired the data without users’ permission from a researcher who Facebook had permitted to utilize the platform and launch an app that collected data from millions of Facebook users.
Facebook believes that the political consultant was inappropriately given access to the data of up to 87 million people.
The incident spurred government inquiries into Facebook’s privacy policies, resulting in lawsuits and a prominent US congressional hearing when Meta head Mark Zuckerberg was question.
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.