Meta Platforms Inc. (META-US) has agreed to pay $725 million to settle a long-running lawsuit alleging that Facebook and research firm Cambridge Analytica illegally shared user data.
The plaintiffs said in a court filing late Thursday that it was the “largest award ever awarded in a data privacy class action and the largest amount ever paid by Facebook to resolve a private class action.”
The settlement brings Meta one step closer to settling a lawsuit brought by Facebook users in 2018 after it emerged that Cambridge Analytica had obtained the data of 87 million Facebook users. The deal needs to be approved by the federal judge in charge of the lawsuit.
Consumers’ lawyers are gradually accumulating more evidence to support Facebook’s claim that it failed to protect personal data, and Facbeook’s parent company could stand to lose hundreds of millions of dollars in damages if the case eventually goes to trial.
In an emailed statement, Meta said the company sought a settlement in the case because it was in the best interests of the community and shareholders, and that over the past three years, the company had improved its approach to privacy protection and implemented a comprehensive privacy plan.
Last month, Google agreed to pay 40 U.S. states a total of $391.5 million to settle investigations into controversial location-tracking practices, in what state officials said was the largest privacy settlement of its kind in U.S. history. Separately, a judge last month approved a $90 million Meta deal to resolve a lawsuit over the use of browser cookies and Facebook’s use of the “Like” button to track user activity.
Meta said in a court filing in August that it had agreed to settle the Cambridge Analytica lawsuit, but did not disclose any terms at the time. A document from a month ago revealed that Meta Chief Executive Mark Zuckerberg would have to be questioned by plaintiffs’ lawyers for up to six hours. The same document indicates that former operating chief Sheryl Sandberg must also testify.
Facebook argues that it discloses its practices in user agreements. The company also said that anyone sharing information on social networks should not expect to retain their privacy.