The parent company of Facebook, Meta, has committed to paying $725 million to resolve a class action lawsuit alleging that the social media behemoth provided user data to third parties without their authorization.
According to Keller Rohrback L.L.P, the plaintiff’s legal team, the settlement is the “biggest settlement ever attained in a data privacy class action and the highest amount Facebook has ever paid to end a private class action.”
Following Facebook’s admission that 87 million users’ data had been inappropriately shared with Cambridge Analytica, a consultancy affiliated with the 2016 presidential campaign of US President Donald Trump, a class action lawsuit was initiated.
The scope of the action was expanded to include Facebook’s entire data-sharing policies. According to the legal firm behind the case, the plaintiffs claimed that Facebook had “given multiple third parties access to their Facebook content and information without their authorization and that Facebook failed to appropriately oversee the third parties’ access to, and use of, that information.” Judges in the Northern District of California who are in charge of the case must now approve the settlement.
“We pursued a settlement because it is best for our neighbourhood and stockholders. We have updated our privacy strategy over the past three years and put in place a thorough privacy program. The settlement did not include an admission of guilt by the company. Global indignation over the Cambridge Analytica incident led a wave of regulators to examine Facebook’s data practices.
Following the revelations, the U.S. Federal Trade Commission launched an investigation into Facebook due to suspicions that the social media company had disregarded the terms of an earlier agreement with the organization, which called for it to notify users when their data was shared with outside parties.
In 2019, Facebook and the FTC reached a $5 billion settlement, a record. Around the same time, Facebook also agreed to pay $100 million to resolve claims that it misled investors about the danger of user data misuse in a complaint with the U.S. Securities and Exchange Commission.
Since Cambridge Analytica used Facebook data to inform political campaigns, it was contentious when it was shut down in 2018 following the claims. In 2018, officials of Cambridge Analytica were caught on camera saying that the company will deploy sex workers, bribes, ex-spies, and fake news to help candidates win votes throughout the world. The footage was broadcast by Britain’s Channel 4 News.
Since the controversy, Facebook has changed its name to Meta to better reflect its expanding aspirations to become a dominant force in the Metaverse, a phrase used to describe online virtual environments. Meta is in charge of Facebook, one of the greatest social media companies in the world.
However, due to a slowdown in the advertising industry, modifications to Apple’s iOS privacy policies, and more competition from TikTok, Facebook’s growth has slowed.