Parent company of the social media platform Facebook, Meta, has agreed to pay $725 million to resolve a lawsuit involving a data breach connected to the political consulting firm Cambridge Analytica.
In the ongoing dispute, Facebook was accused of granting access to user data to third parties, including the British company.
According to attorneys, the proposed amount is the highest 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 shareholders," the company claimed in a statement.
"We look forward to continuing to build services people love and trust with privacy at the forefront."
The fact that Meta had to consent to a significant payout was "not a surprise," but the amount paid to the tech giant was "not that much," say experts in the field.
"It's less than a tenth of what it spent on its efforts to create 'the metaverse' last year alone," and expert in the field said.
"So Meta probably won't be too unhappy with this deal, but it does stand as a warning to social media companies that mistakes can prove very costly indeed."
The proposed settlement must be approved by a federal judge in San Francisco and was revealed in a court filing late on Thursday.
"This historic settlement will provide meaningful relief to the class in this complex and novel privacy case," lead lawyers for the plaintiffs, Derek Loeser and Lesley Weaver, said in a statement.
A significant proposed class of Facebook users whose personal information on the social network was unintentionally disclosed to third parties filed the complaint on their behalf.
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 24 May 2007 and 22 December 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 ethics 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.
"Even though this $725m settlement doesn't cover UK users, earlier this year a competition law expert put forward a multi-billion dollar class action suit against Meta regarding users' data exploitation that does cover the Cambridge Analytica period.
"We should hear more about that from the UK Competition Appeal Tribunal in the new year," she said.
The privacy scandal involving Cambridge Analytica, which was made public in 2018, was centered on the collection of Facebook users' personal data by outside apps.
The now-defunct consulting 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 that data without users' permission from a researcher who had been given permission by Facebook to use the platform and deploy an app that collected data from millions of Facebook users.
Facebook believes that the political consultancy was improperly given access to the data of up to 87 million people.
Government inquiries into Facebook's privacy policies were prompted by the scandal, and this resulted in lawsuits and a prominent US congressional hearing where Meta boss Mark Zuckerberg was questioned.
In order to end a Federal Trade Commission investigation into its privacy practices, Facebook agreed to pay $5 billion in 2019.
Additionally, the tech giant forked over $100 million to settle claims made by the US Securities and Exchange Commission that it had misled investors about the misuse of user data.
The company is contesting a legal action brought by the attorney general of Washington, DC, and state attorneys general are still conducting investigations.\
(Source:www.cnet.com)
In the ongoing dispute, Facebook was accused of granting access to user data to third parties, including the British company.
According to attorneys, the proposed amount is the highest 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 shareholders," the company claimed in a statement.
"We look forward to continuing to build services people love and trust with privacy at the forefront."
The fact that Meta had to consent to a significant payout was "not a surprise," but the amount paid to the tech giant was "not that much," say experts in the field.
"It's less than a tenth of what it spent on its efforts to create 'the metaverse' last year alone," and expert in the field said.
"So Meta probably won't be too unhappy with this deal, but it does stand as a warning to social media companies that mistakes can prove very costly indeed."
The proposed settlement must be approved by a federal judge in San Francisco and was revealed in a court filing late on Thursday.
"This historic settlement will provide meaningful relief to the class in this complex and novel privacy case," lead lawyers for the plaintiffs, Derek Loeser and Lesley Weaver, said in a statement.
A significant proposed class of Facebook users whose personal information on the social network was unintentionally disclosed to third parties filed the complaint on their behalf.
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 24 May 2007 and 22 December 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 ethics 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.
"Even though this $725m settlement doesn't cover UK users, earlier this year a competition law expert put forward a multi-billion dollar class action suit against Meta regarding users' data exploitation that does cover the Cambridge Analytica period.
"We should hear more about that from the UK Competition Appeal Tribunal in the new year," she said.
The privacy scandal involving Cambridge Analytica, which was made public in 2018, was centered on the collection of Facebook users' personal data by outside apps.
The now-defunct consulting 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 that data without users' permission from a researcher who had been given permission by Facebook to use the platform and deploy an app that collected data from millions of Facebook users.
Facebook believes that the political consultancy was improperly given access to the data of up to 87 million people.
Government inquiries into Facebook's privacy policies were prompted by the scandal, and this resulted in lawsuits and a prominent US congressional hearing where Meta boss Mark Zuckerberg was questioned.
In order to end a Federal Trade Commission investigation into its privacy practices, Facebook agreed to pay $5 billion in 2019.
Additionally, the tech giant forked over $100 million to settle claims made by the US Securities and Exchange Commission that it had misled investors about the misuse of user data.
The company is contesting a legal action brought by the attorney general of Washington, DC, and state attorneys general are still conducting investigations.\
(Source:www.cnet.com)
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