The US Supreme Court has given the green light for a multibillion-dollar class action lawsuit to proceed against Meta, Facebook’s parent company, over its involvement in the Cambridge Analytica data scandal. The decision could spell trouble for the tech giant as investors push forward with claims of misleading disclosures tied to the infamous privacy breach.
Meta had sought to block the lawsuit, but on Friday, the Supreme Court dismissed the company’s appeal, effectively allowing the case to move forward. This follows an appellate court decision that ruled in favor of the investors. According to a report by The Associated Press, the lawsuit accuses Meta of failing to adequately warn investors about the risks tied to Facebook users’ personal data being harvested and misused by Cambridge Analytica.
The scandal, which shook the tech world, revolved around Cambridge Analytica accessing personal information from about 87 million Facebook users without their proper consent. The data was allegedly used to target voters during Donald Trump’s 2016 presidential campaign.
What’s at Stake?
The investors allege that Meta’s failure to disclose the extent of the data misuse resulted in two sharp drops in the company’s stock price in 2018. These drops occurred when the scale of the privacy scandal became public knowledge. The lawsuit claims these losses could have been avoided if Meta had been more transparent with its disclosures.
Here’s a quick breakdown of what Meta is facing:
- Meta has already paid a $5.1 billion fine related to the scandal. Additionally, it reached a $725 million settlement with users over privacy violations.
- The lawsuit alleges that the scandal’s revelations caused significant investor losses.
- Beyond this lawsuit, Meta is also dealing with various privacy-related challenges globally.
Cambridge Analytica, which was linked to former Trump strategist Steve Bannon, reportedly paid a Facebook app developer for access to the user data. This trove of personal information was then weaponized to target American voters during the 2016 election.
The lawsuit against Meta isn’t the only major tech case facing scrutiny. The Supreme Court is also handling another class-action lawsuit involving Nvidia, where investors allege the company misled them about its reliance on cryptocurrency-related chip sales.
What Meta Says
Meta has expressed disappointment with the Supreme Court’s decision to let the case proceed. The company maintains that the investors’ claims lack merit and has vowed to defend itself as the case moves to the District Court.
Comments are closed.