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Meta consents to pay a record $725 million to resolve the Cambridge Analytica lawsuit

Mark Zuckerberg’s Meta (previously Facebook) had a rough 2022. Meta will have to pay a record $725 million to resolve the class-action lawsuit connected to the Cambridge Analytica data harvesting scandal, capping off a year in which the company lost some of its most devoted advertisers and suffered a catastrophic collapse of its flagship Metaverse project, Horizon Worlds.

With the $725 million settlement, Meta will once again avoid responsibility for its treatment of user data without having to acknowledge any wrongdoing. Source of Image: AFP

A deal has been reached in the four-year-old complaint that was first filed in the Northern District of California. Reuters first reported the settlement agreement this morning.

Meta has fought back against the case during the years that followed, arguing that members of a social network who opted in voluntarily have no right to demand privacy from its operators. In 2019, the presiding judge in the case called this line of thinking “very incorrect.”

The now-defunct U.K. political consulting firm Cambridge Analytica used a survey app called MyDigitalLife to collect data from tens of millions of Facebook users with the intention of using that data to influence voting behaviour through targeted advertisements, leading to the latest scandal that has rocked the world of Facebook. Several settlements and penalties were handed out as a result of the privacy scandal.

For example, Meta settled with the FTC for $5 billion, with the SEC for $100 million for misleading investors, and with the U.K. Information Commissioner’s Office for a relatively small £500,000 ($600,000).

While the Cambridge Analytica scandal was the initial impetus for this class action complaint, it has now been expanded to cover any third parties who may have improperly accessed or exploited Facebook users’ data.

Mark Zuckerberg, CEO and co-founder of Meta, had previously testified before Congress about the scandal, but his answers were somewhat evasive, and aside from a carefully controlled testimony before the EU Parliament shortly after, the upper echelons at Meta have not had to face any more direct questioning on the matter.

However, Zuckerberg, Sheryl Sandberg (the current COO), and Javier Olivan (the prior COO) were all set to reappear in court because of this ongoing lawsuit. Clearly, Meta didn’t want this to occur, and now that an agreement has been reached, it won’t.

The attorneys representing the plaintiffs and Meta state in the court filing announcing the proposed settlement that the agreement reached between the parties represents a “extraordinary outcome,” yielding the “largest recovery ever achieved in a data privacy class-action and the most Facebook has ever paid” to resolve a private class-action lawsuit.

In a statement given to Reuters, Meta claimed the $725 million settlement was “in the greatest interest of our community and shareholders” while again denying any wrongdoing. It’s worth noting that the settlement applies to every Facebook user in the United States, albeit they’ll each get a far smaller share of the settlement money if they apply.

Final approval of the settlement is pending, but it is expected to be granted at a hearing scheduled for March 2, 2023.

There’s yet more to come from Cambridge Analytica, as Washington, DC is suing Zuckerberg on a personal level, holding him responsible for the errors that sparked the disaster.