%MetaPlatforms ($META) has agreed to pay $725 million U.S. to settle a class action lawsuit that claimed the social media company gave third parties access to user data without their consent.
The class action lawsuit arose in 2018 after social media platform Facebook disclosed that the information of 87 million users was improperly shared with Cambridge Analytica, a consulting firm linked to former U.S. President Donald Trump’s 2016 election campaign.
The case was broadened to focus on Facebook’s overall data-sharing practices. Plaintiffs in the legal action claimed that Facebook “granted numerous third parties access to their Facebook information without their consent.”
Judges overseeing the case in California must now approve the settlement amount.
The %CambridgeAnalyticaScandal prompted global outrage and a flurry of regulators worldwide to scrutinize Facebook’s data sharing practices.
The U.S. Federal Trade Commission (FTC) opened a probe into Facebook over concerns that the social media firm had violated the terms of a previous agreement with the agency, which required it to give users clear notifications when their data was being shared with third parties.
Facebook in 2019 agreed to a record $5 billion U.S. settlement with the FTC. Facebook also agreed to pay $100 million U.S. to settle a case around the same time with the U.S. Securities and Exchange Commission (SEC).
Cambridge Analytica shutdown in 2018 following multiple scandals. British media reports claimed that Cambridge Analytica executives used sex workers, bribes, corporate spies, and fake news to help political candidates, including Donald Trump, win elections around the world.
Since the scandal, Facebook changed its name to Meta Platforms to reflect its growing focus on developing the %Metaverse.
Meta’s stock is down 65% in 2022 and trading at $117.12 U.S. per share.