Meta Said to Settle Cambridge Analytica Scandal Case for $725 Million

Facebook owner Meta Platforms Inc has agreed to pay $725 million (roughly Rs. 6,000 crore) 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, which was disclosed in a court filing late on Thursday, would resolve a long-running lawsuit prompted by revelations in 2018 that Facebook had allowed the British political consulting firm Cambridge Analytica to access the data of as many as 87 million users.

Lawyers for the plaintiffs called the proposed settlement the largest to ever be achieved in a US data privacy class action and the most that Meta has ever paid to resolve a class action lawsuit.

"This historic settlement will provide meaningful relief to the class in this complex and novel privacy case," the lead lawyers for the plaintiffs, Derek Loeser and Lesley Weaver, said in a joint statement.

Meta did not admit wrongdoing as part of the settlement, which is subject to the approval of a federal judge in San Francisco. The company said in a statement settling was "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," Meta said.

Cambridge Analytica, now defunct, worked for Donald Trump's successful presidential campaign in 2016, and gained access to the personal information from millions of Facebook accounts for the purposes of voter profiling and targeting.

Cambridge Analytica obtained that information without users' consent from a researcher who had been allowed by Facebook to deploy an app on its social media network that harvested data from millions of its users.

The ensuing Cambridge Analytica scandal fueled government investigations into its privacy practices, lawsuits and a high-profile US congressional hearing where Meta Chief Executive Mark Zuckerberg was grilled by lawmakers.

In 2019, Facebook agreed to pay $5 billion (roughly Rs. 41,500 crore) to resolve a Federal Trade Commission probe into its privacy practices and $100 million (roughly Rs. 850 crore) to settle US Securities and Exchange Commission claims 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 attorney general for Washington, DC.

Thursday's settlement resolved claims by Facebook users that the company violated various federal and state laws by letting app developers and business partners harvest their personal data without their consent on a widespread basis.

The users' lawyers alleged that Facebook misled them into thinking they could keep control over personal data, when in fact it let thousands of preferred outsiders gain access.

Facebook argued its users have no legitimate privacy interest in the information they shared with friends on social media. But US District Judge Vince Chhabria called that view "so wrong" and in 2019 largely allowed the case to move forward.

© Thomson Reuters 2022

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