Meta agrees to pay $725mn to settle Cambridge Analytica case

Meta has agreed to pay $725mn to settle a class-action lawsuit that claimed that the social media giant, which owns Facebook, Instagram and WhatsApp, allowed third parties to access users’ personal information.

The proposed amount would be the largest settlement achieved in a US data privacy class action, and the most Meta has ever paid out in a lawsuit, revealed in a court filing released on Thursday.

The long-running case was prompted by the Cambridge Analytica scandal in 2018, where a company whistleblower revealed that Facebook allowed the British political consulting firm to access the personal data of up to 87mn users. However, the class action lawsuit expanded the remit to include other third parties that may have inappropriately used Facebook data.

Meta’s settlement, which does not admit any wrongdoing, comes with the company hit by the slowest growth in revenues since going public amid fierce competition from social media rivals and a slump in digital advertising.

Last month, the social network led by chief executive Mark Zuckerberg cut 11,000 staff, about 13 per cent of its workforce, as part of cost-saving measures and recently reduced office space in the UK and US.

The class action lawsuit claimed that the company had allowed app developers and business partners to access users’ data without their consent. The estimated number of people affected in the case is between 250mn and 280mn people, representing all US Facebook users between 2007 and 2022, the filing said.

Meta said it had revamped its approach to privacy over the past three years. “We pursued a settlement as it is in the best interest of our community and shareholders,” it added in a statement.

Digital rights campaigners and whistleblowers previously accused Cambridge Analytica of using harvested personal data to influence the results of the UK’s EU referendum and the 2016 US presidential election and breaking campaign rules.

Meta paid a £500,000 fine to the UK’s data watchdog over Cambridge Analytica, which found no evidence that it misused data in an attempt to influence the Brexit referendum or help any Russian intervention in political processes but that it had failed to protect the personal information of its users.

The tech giant has also paid $5bn to resolve a US Federal Trade Commission probe into Meta privacy practices and $100mn to settle a US Securities and Exchange Commission investigation over claims it misled investors about the misuse of user data.

Multiple investigations by US state attorneys-general are ongoing.