Meta Platforms rises as Facebook parent agrees to pay $725M Cambridge Analytica lawsuit
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Meta Platforms (NASDAQ:META) shares rose fractionally in premarket trading on Friday as the parent company of Facebook agreed to pay $725M to settle a class action lawsuit against it over the Cambridge Analytica scandal.
The suit, handled by Rohrback L.L.P, said the benefits were "unprecedented in size" and is the largest amount ever paid in a data privacy class and the most Facebook has ever paid to resolve a private class action lawsuit.
The suit alleged that Facebook gave third parties access to user data without obtaining their consent.
"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 agreement added.
Though the plaintiffs and the defendant have agreed to the terms, the judges overseeing the case in the Northern District of California will have to approve it to put a final stamp on the matter.
The lawsuit was brought about in July 2018 after Facebook disclosed 87M users had their data improperly shared with Cambridge Analytica, which had ties to former President Trump's 2016 presidential campaign.
Cambridge Analytica eventually shut down in May 2018.
The lawsuit estimated that the class size is between 250M and 280M, adding that it did not have the ability to "identify the precise number due to a lack of records that can account for duplicate accounts."
Meta (META) has previously settled with the Federal Trade Commission and the U.S. Securities and Exchange Commission over the scandal, agreeing to a $5B settlement with the FTC and a $100M fine to the SEC over the scandal.
Menlo Park, California-based Meta (META) was recently named one of investment firm Baird's top picks for 2023.