In a surprisingly swift resolution to the class-action lawsuit brought against Facebook parent company Meta, they have formally accepted to pay $725 million after being accused of inappropriately sharing their users’ data with Cambridge Analytica. This is particularly notable since this firm had been hired by then-President Trump’s campaign team for its advanced analytics capabilities.
Out of the 2018 revelations that a third-party firm may have taken control of up to 87 million people’s data, this proposed settlement has come about. The same company filed for bankruptcy two years ago and is now attempting to make amends with those affected by their careless behavior.
On Thursday, the plaintiffs’ lawyers declared this as the biggest data privacy class action resolution and Facebook’s most expensive private settlement to date.
Meta has not accepted any wrongdoings and asserts that its users willingly agreed to the practices, without experiencing actual damages. Dina El-Kassaby Luce, a spokesperson for Meta mentioned in an official statement that this resolution was “in the best interest of its community and shareholders” and also informed us of their current revamp on privacy policies.
The plaintiffs’ attorneys predict that between 250 to 280 million individuals may be eligible for monetary compensation as part of the class action settlement. The magnitude of their settlements will ultimately depend on how many people responsibly register valid claims.
The legal representatives of the plaintiffs made their statement in a court filing-
“The amount of the recovery is particularly striking given that Facebook argued that its users consented to the practices at issue and that the class suffered no actual damages.”
After the Cambridge Analytica data scandal involving Facebook, government bodies around the world have launched probes into their privacy policies and regulations. This revelation has sparked significant public outrage worldwide.
In 2020, Facebook’s CEO Mark Zuckerberg was the subject of intense scrutiny when he appeared before Congress and was a crucial part of the Federal Trade Commission’s privacy case. Subsequently, as a result of his testimony and agreement to pay the FTC $5 billion in fines, Facebook had to endure considerable public backlash.
To settle U.S. Securities and Exchange Commission allegations that Facebook had concealed the potential risks of user data misuse, the tech giant agreed to pay a sum of $100 million.
In 2015, Facebook first discovered the data leak that was traced back to a Cambridge University psychology professor who had harvested information from users of its platform for a personality test. This same individual then passed this illegally obtained data on to Cambridge Analytica.
Cambridge Analytica served as a psychological profiler for American voters, making it easier and more effective for campaigns to personalize their communications. It was used by Texas Senator Ted Cruz during his 2016 presidential campaign, and later on by President Donald Trump after he won the Republican nomination.
According to a reliable source close to Trump’s campaign data, the Cambridge Analytica team bypassed psychological profiling and instead focused on boosting online donations and connecting with undecided voters.
In 2019, Christopher Wylie, a whistleblower exposed Cambridge Analytica’s role in Brexit. It was revealed that the firm used Facebook data to target individuals inclined towards conspiracy theories and influence them into voting for a British withdrawal from the European Union.
During his tenure as a Trump adviser, Steve Bannon served as the vice president of Robert Mercer’s esteemed hedge fund. The U.S.-based billionaire owned significant parts of the firm then.
On March 2, 2023, a hearing will occur before the court in which it is anticipated that a federal judge will grant final approval to the settlement.
Shivendra Tiwari is an Engineer and an MBA in Marketing. He is the Content head at Marketing91 and a thorough Online Marketing enthusiast. Shivendra loves to follow different brands and study their Business and Marketing tactics.