Facebook parent Meta agrees to pay $725 million to settle privacy lawsuit

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Parent Facebook Meta agreed to pay $725 million to settle a class action lawsuit that alleged the social media giant gave third parties access to user data without their consent.

This is “the largest ever recovery in a data privacy class action and the most Facebook has ever paid to resolve a private class action,” said Keller Rohrback LLP, the law firm representing plaintiffs, in a filing Thursday evening announcing the settlement. .

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The class action lawsuit was launched in 2018 after Facebook revealed that information from 87 million users were inappropriately shared with Cambridge Analyticaa consulting firm related to former President Donald Trump’s election campaign in 2016.

The case has been expanded to focus on Facebook’s overall data sharing practices. The plaintiffs alleged that Facebook “granted numerous third parties access to their Facebook content and information without their consent, and that Facebook failed to adequately monitor Facebook’s access to and use of that information.” third parties,” according to the law firm behind the lawsuit. .

Judges overseeing the case in the Northern District of California will now have to approve the settlement.

“We have sought a settlement because it is in the best interest of our community and our shareholders. Over the past three years, we have revamped our approach to privacy and implemented a comprehensive privacy program,” said a Meta spokesperson at CNBC. The company has not admitted any wrongdoing under the settlement.

Cambridge Analytica

The Cambridge Analytica scandal sparked global outrage and a flurry of regulators around the world to scrutinize Facebook’s data practices.

After the revelations, the U.S. Federal Trade Commission launched an investigation into Facebook over concerns that the social media company violated the terms of a previous agreement with the agency, which required it to give users clear notifications when their data was shared with third parties. .

Facebook in 2019 accepted a record $5 billion settlement with the FTC. Facebook also agreed to pay $100 million to settle a case around the same time with the U.S. Securities and Exchange Commission over allegations that the company made misleading disclosures about the risk of misuse of user data.

Cambridge Analytica, which shut down after the allegations in 2018, was controversial because the data it harvested from Facebook was used to inform political campaigns.

In 2018, the British channel Channel 4 News filmed of Cambridge Analytica executives suggesting that the company would use sex workers, kickbacks, former spies and fake news to help candidates win votes around the world.

Since the scandal, Facebook changed its name to Meta to reflect its growing ambitions to become a leader in the metaverse, a term used to refer to virtual worlds. Facebook, still one of the largest social media companies in the world, is run by Meta.

But Facebook has seen a slowdown in growth due to a slowdown in the advertising market, changes to Apple’s iOS privacy policies, and growing competition from TikTok.

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