The Supreme Court has decided to allow a multibillion-dollar class action investors’ lawsuit to proceed against Facebook’s parent company, Meta, related to the Cambridge Analytica privacy scandal.
The big picture: Meta had sought to shut down the lawsuit, arguing that the case should not have been taken up by the court. However, the Supreme Court dismissed Meta’s appeal and upheld an appellate ruling that allows the class action to move forward.
- Investors claim that Meta failed to disclose the risks associated with the misuse of Facebook users’ personal information by Cambridge Analytica, which supported Donald Trump’s 2016 presidential campaign.
Driving the news: In 2018, revelations about the privacy scandal caused two significant price drops in Meta’s shares, according to investors who allege that inadequate disclosures contributed to these drops.
- Meta had previously paid a $5.1 billion fine and reached a $725 million privacy settlement with users as part of their response to the Cambridge Analytica scandal.
- Cambridge Analytica, with ties to Trump political strategist Steve Bannon, obtained personal information from about 87 million Facebook users through a Facebook app developer. This data was then used to target U.S. voters during the 2016 campaign.
