Facebook parent company Meta has agreed to pay $725 million to settle a class-action lawsuit claiming it improperly shared users' information with Cambridge Analytica, a data analytics firm used by the Trump campaign.
The proposed settlement is a result of revelations in 2018 that information of up to 87 million people may have been improperly accessed by the third-party firm, which filed for bankruptcy in 2018. This is the largest recovery ever in a data privacy class action and the most Facebook has paid to settle a private class action, the plaintiffs' lawyers said in a court filing Thursday.
Meta did not admit wrongdoing and maintains that its users consented to the practices and suffered no actual damages. Meta spokesperson Dina El-Kassaby Luce said in a statement that the settlement was "in the best interest of its community and shareholders" and that the company has revamped its approach to privacy.
Plaintiffs' lawyers said about 250 million to 280 million people may be eligible for payments as part of the class action settlement. The amount of the individual payments will depend on the number of people who come forward with valid claims.
"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," the plaintiffs' lawyers said in the court filing.
Facebook's data leak to Cambridge Analytica sparked global backlash and government investigations into the company's privacy practices the past several years.
Facebook CEO Mark Zuckerberg gave high-profile testimonies in 2020 before Congress and as part of the Federal Trade Commission's privacy case for which Facebook also agreed to a $5 billion fine. The tech giant also agreed to pay $100 million to resolve U.S. Securities and Exchange Commission claims that Facebook misled investors about the risks of user data misuse.
Facebook first learned of the leak in 2015, tracing the violation back to a Cambridge University psychology professor who harvested data of Facebook users through an app to create a personality test and passed it on to Cambridge Analytica.
Cambridge Analytica was in the business to create psychological profiles of American voters so that campaigns could tailor their pitches to different people. The firm was used by Texas Sen. Ted Cruz's 2016 presidential campaign and then later by former President Donald Trump's campaign after he secured the Republican nomination.
According to a source close to the Trump campaign's data operations, Cambridge Analytica staffers did not use psychological profiling for his campaign but rather focused on more basic goals, like increasing online fundraising and reaching out to undecided voters.
Whistleblower Christopher Wylie then exposed the firm for its role in Brexit in 2019. He said Cambridge Analytica used Facebook user data to target people susceptible to conspiracy theories and convince British voters to support exiting the European Union. Former Trump adviser Steve Bannon was the vice president and U.S. hedge-fund billionaire Robert Mercer owned much of the firm at the time.
The court has set a hearing for March 2, 2023, when a federal judge is expected to give the settlement final approval.
NPR's Bobby Allyn contributed reporting.
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