Meta Platforms, Inc. investors have urged a US appeals court to revive the proposed class-action lawsuit that accused the tech conglomerate of concealing large-scale data breaches involving the now defunct political consulting firm, Cambridge Analytica.
Investors have claimed that Meta (known as Facebook at the time) misled them regarding the controversy in 2016 by downplaying the serious data breach as a mere “risk”, despite knowing that Cambridge Analytica had accessed personal information of more than 87 million Meta consumers.
After the breach became public in July 2018, the investors suffered losses as a result of drop in Meta’s share price. In 2020, however, US District Judge Edward Davila ruled that Meta’s statements were not false as Cambridge Analytica’s access to the data of Facebook users had already been reported on in 2015.
The investors’ lawyer has called for Davila’s ruling to be reversed, arguing that Meta had not taken serious action in response to the news reports and had downplayed them. Meta’s lawyer Joshua Lipshutz, on the other hand, said the social media giant had confirmed the cyberattacks stating they would occur in the future as well.
Lipshutz’s counter was met with skepticism from Judges Margaret McKeown and Jay Bybee, who termed Meta’s disclosure of data breaches “boilerplate”.
“If they have one incident of phishing by some 18-year-old sitting in his parent’s basement it’s true,” remarked Bybee. “But it’s not helpful considering the nature of the leak to Cambridge.”
Meta’s lawyer stood his ground and said even if the company’s statement had been misleading, the investors must still show it had wrongful intent. “It’s not plausible that the company was trying to mislead the public about something the public already knew.”
The Cambridge Analytica controversy invoked widespread media scrutiny and set off a wave of condemnation across the globe, with Meta being slammed for repeated violations of user privacy. The company has since paid more than $5 billion in fines to the Federal Trade Commission (FTC). In December 2022, it agreed to pay $725 million to settle a class-action lawsuit filed by Facebook users.
The complainants had accused Meta of harvesting and sharing, without consent or knowledge, their “highly personal and revealing” data (photos, videos posted or viewed, religious and political views, information regarding relationships, and even the exact words used by them in their messages).
Meta, in response to the allegations, had remarked that users cannot claim privacy violations when they are the ones posting information about themselves on social media or websites that are publicly accessible.
Meta’s claims were later rejected by the court.
