Facebook Agrees to $725 Million Settlement to End Privacy Suit

Meta Platforms, Inc. has agreed to pay $725 million to current and former Facebook users for the platform’s alleged violation of the Stored Communications Act and the Video Privacy Protection Act, as well as to settle claims for negligence, invasion of privacy, and breach of contract.

Specifically, Plaintiffs allege that Facebook’s data-sharing practices were flawed because Facebook granted numerous third parties access to Facebook users’ content and information without their consent and failed to adequately monitor the third parties’ use of that information.

The multi-district litigation began in 2018, when Facebook disclosed that a third-party app on the platform, “thisisyourdigitallife,” had been used to collect and sell information from 87 million Facebook users to Cambridge Analytica, a U.K. based consultancy firm. Cambridge Analytica declared bankruptcy soon after news of the scandal became public.

In the Motion to Certify a Settlement Class and Grant Preliminary Settlement Approval (“Motion”), Plaintiffs explained that they faced “extraordinary challenges” in this litigation. Specifically, “[b]ecause of the asymmetry of information regarding Facebook’s actual data sharing practices, Plaintiffs were seeking discovery about entirely unknown categories of data and data processing, learning about Facebook’s proprietary systems without knowing the language Facebook uses to describe them.”

Despite this hurdle, Plaintiffs ultimately obtained enough key information to assess the likelihood of victory at the class certification, summary judgment, and trial stages, as well as the ongoing risk of litigation. According to the Motion, Plaintiffs secured nearly 6 million pages of documents, significant volumes of structured data, and approximately 310 hours of testimony from 48 individuals.

Since an initial mediation on November 20, 2021, the parties exchanged multiple settlement demands and offers, with a Judge often serving as an intermediary in discussions and subsequent mediation sessions. Finally, a settlement agreement was executed on December 22, 2022.

The Settlement Agreement defines the Settlement Class as “all Facebook users in the United States during the Class Period,” which is May 24, 2007 to December 22, 2022, inclusive. Counsel estimates this number to be between 250 million to 280 million people.

In the Motion, Plaintiffs noted that if approved, the $725 million Settlement Fund would be the largest ever. They identified only 13 cases with settlement funds greater than $75 million, all of which are related to consumer privacy and concluded in 2015 or later.

A hearing to consider Plaintiffs’ Motion for preliminary approval of the settlement has been set for March 2, 2023.

Updates will be posted to this blog as the matter progresses. The case caption for the lawsuit is In re: Facebook Inc. Consumer Privacy User Profile Litigation, case number 3:18-md-02843, filed in the United States District Court for the Northern District of California.

The legal team at Miller Shah LLP has significant experience representing class action matters. If you have any questions regarding this subject or this post, please contact Jonathan Dilger (jadilger@millershah.com) or Natalie Finkelman Bennett (nfinkelman@millershah.com). The firm can also be reached toll-free at (866) 540-5505.

Miller Shah LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. The firm is an active member of International Advisory Group (iag.global), which provides clients with access to excellent legal and accounting resources across the globe. For more information about the firm, please visit www.millershah.com.

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