Facebook puts a price on privacy for US users and it's not enough to buy a cup of coffee
Coughs up $725 million to settle class action that covers 244 million users
In 2018, Facebook was sued multiple times for allegedly selling access to account holder data, contrary to privacy commitments.
The complaints arose from accusations that Facebook allowed political consulting firm Cambridge Analytica to access the personal data of 87 million Facebook users, information the firm allegedly used to target voters with political ads, both on and off Facebook, during the 2016 election seasons in the US and UK.
Five years later, US-based individuals who used Facebook at any time from May 24, 2007 though December 22, 2022, have the opportunity to get paid a token amount for their data, and for having their privacy denied.
At the end of March, a federal judge approved a $725 million settlement between Meta, now Facebook's parent org, and the class action plaintiffs who challenged the company's handling of user data. The case covers eight separate claims brought in California, Illinois, New Jersey, and Texas in the US.
With the conclusion of the case, In re: Facebook, Inc. Consumer Privacy User Profile Litigation, those who used Facebook in America during the specified 15 year period have until August 25, 2023 to apply for a cash payment. Payments will be made from the settlement fund, minus attorneys' fees of no more than 25 per cent and litigation costs.
The amount of the payment depends on the number of people who submit valid claims and on the amount of time the claimant was a Facebook user within the covered period. Given the number of potential claimants the reward could be very small.
Data service Statista suggests there are about 244 million Facebook users in the US. If every single eligible US Facebook user applied and had a claim approved, the payout probably would be a few dollars.
But many won't bother. Eligible individuals also have the option to opt-out of the settlement to pursue a claim separately.
Settlement class representatives – the individual plaintiffs who brought the claims – are set to receive an award not to exceed $15,000 each. The lawyers involved can also claim up to a quarter of that $725 million fund to cover their fees and expenses. That's about $180 million tops.
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The combined complaint accuses Facebook of allowing not just Cambridge Analytica but tens of thousands of third-apps to download user content and information, and of selling access to customer data to business partners like Airbnb, Lyft, Netflix, and Yandex.
"These revelations have shown that Facebook is not just a social media company, but also a data broker and surveillance firm," the complaint [PDF] alleges. "Facebook encourages users to share their content so that Facebook can harvest it, aggregate it, and sell access to it."
Facebook, after spending years fighting these and related allegations in court, chose last August to settle. With the approval of that settlement, the company is now preparing to pay to resolve these privacy claims, though it denies that it violated the law.
The court has scheduled a final hearing in the case for September 7, 2023 to determine whether the requirements for the class settlement have been met.
Facebook in 2019 was fined $5 billion by the US Federal Trade Commission for violating consumers' privacy as a result of the Cambridge Analytica scandal. The UK Information Commissioner levied a far more modest penalty of £500,000 (~$622,000), the maximum allowed.
Mark Zuckerberg's net worth is estimated to be about $80 billion. Meta's revenue in 2022 totalled $116.61 billion. ®