Meta resolves the Cambridge Analytica controversy for $725 million

Meta, the company running Facebook, has agreed to pay $725 million (£600 million) to resolve a court lawsuit stemming from a data breach connected to political consultancy Cambridge Analytica. The long-running case accused Facebook of granting third parties, including the British business, access to Facebook users' personal information.

According to attorneys, the proposed settlement is the biggest in a US data privacy class action. Meta, which did not acknowledge violation, stated that it has "revamped" its privacy policies during the previous three years.

In a statement, the company claimed settlement was "in the best interest of our community and shareholders".

"We look forward to continuing to build services people love and trust with privacy at the forefront."

According to tech columnist James Ball, it was not surprising that Meta had to agree to a significant pay-out, although it was "not that much" money to the social media giant. In fact, it's less than a tenth of its spending over the last year alone on development of the metaverse. "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 deal, revealed in a court filing, is subject to approval by a federal judge in San Francisco.

As argued in a statement by the plaintiffs' main lawyers, Derek Loeser and Lesley Weaver, "this historic settlement will provide meaningful relief to the class in this complex and novel privacy case."

According to the court document, the class size is around 250-280 million persons, covering all Facebook users in the United States from May 24, 2007 through December 22, 2022. It's unclear how the plaintiffs will get their cut of the settlement. Janis Wong, a privacy and ethics researcher at The Alan Turing Institute, estimated that if each individual opted to file a claim, it would only cost two or three dollars.

A subsequent hearing on the settlement is scheduled on 2 March, 2023.

Even if this $725 million settlement doesn't include UK users, earlier this year a competition law expert came up with a multi-billion dollar class action claim against Meta concerning users' data misuse that does span the Cambridge Analytica timeframe. So, it is expected to hear more about that over the next year from the UK Competition Appeal Tribunal.

Third-party applications harvesting Facebook users' personal information was at the heart of the Cambridge Analytica privacy crisis, which was uncovered in 2018.

The now-defunct consultancy business worked for Donald Trump's successful presidential bid in 2016, using personal data gathered from millions of US Facebook users for voter profiling and targeting.

The company received the data without the knowledge of the users from a researcher who had been granted permission by Facebook to launch an app on the network that harvested data from millions of its accounts. Facebook thinks up to 87 million people's data was unlawfully shared with the political consulting firm.

The incident spurred government inquiries into Facebook's privacy policies, which resulted in lawsuits and a high-profile US congressional hearing where Meta CEO Mark Zuckerberg was questioned.

In 2019, Facebook agreed to compensate $5 billion to settle an FTC investigation into its privacy practices. In addition, the internet giant paid $100 million to resolve SEC charges that it deceived investors about the misuse of customers' data.

State attorneys general are continuing their investigations, and the company is dealing with a legal action led by the attorney general for Washington DC.