Facebook parent Meta today reportedly agreed to pay $725 million (about 5.068 billion yuan) to settle a class action lawsuit over the Cambridge Analytica scandal. The lawsuit alleged that Meta improperly allowed third parties to access the personal information of its users.
The settlement is the largest settlement ever reached in a U.S. data privacy class action and the highest amount ever paid by Meta in a lawsuit.
The long-running case was sparked by the Cambridge Analytica scandal in 2018. Meta (than Facebook) admitted in March 2018 that Cambridge Analytica, a British data analytics company, had obtained information on 50 million Facebook users in violation of the law before the 2016 U.S. presidential election. Meta later found, after an investigation, that up to 87 million users’ information had been improperly shared by Cambridge Analytica.
In addition, the class action lawsuit expands the scope of the lawsuit to include other third parties that may have used Facebook data improperly. The lawsuit alleges that Meta allowed app developers and business partners to access user data without their consent. The case is expected to affect between 250 million and 280 million people, representing all U.S. Facebook users between 2007 and 2022.
Meta also said today that it has modified its privacy practices over the past three years. in a statement, Meta said, “We seek a settlement because it is in the best interests of our community and our shareholders.”
While agreeing to pay $725 million in damages, Meta did not admit to any wrongdoing. Since the scandal in 2018, Meta has been trying to save the company’s reputation. in October 2021, Facebook changed its name to Meta, but it is still haunted by the “Cambridge Analytica scandal.” Currently, Meta is experiencing its slowest revenue growth since going public, due to intense competition in the social space and a decline in digital advertising.
Last month, Meta laid off 11,000 employees or about 13 percent of its workforce. Meta also recently cut office space in the U.K. and the U.S. as part of cost-saving measures.
In 2019, Meta also paid $5 billion to the U.S. Federal Trade Commission (FTC) to close the FTC’s investigation into the matter.
