Typically, when you hear about Facebook, the news centers around the staggering net worth of its leaders or its latest developments and features, like the addition of Reels or the adoption of artificial intelligence.
This should come as no surprise, as past and current executives like Sean Parker, Sheryl Sandberg, and Mark Zuckerberg have earned billions from the social media platform. The company also has a knack for ongoing innovation, which has kept it relevant in the constantly evolving social-technology sphere.
However, Facebook has received several public relations (PR) black eyes over the last few years, the biggest of which is a $725 million class-action lawsuit settlement.
Here’s everything you need to know about the Facebook class action lawsuit settlement, including how many Facebook users were impacted and the timeframe for disbursing class action lawsuit pending payments.
Background of the Facebook Class Action Lawsuit
Facebook changed the social media landscape (and digital marketing as we know it) when it monetized user data. While Zuckerberg and his team weren’t the first to monetize social media platforms, they’ve proven better at it than anyone else.
Apparently, Facebook is also proving to be better at violating user privacy, as its class action settlement is the largest data privacy class action case in US history. The case highlights the increasing scrutiny of how tech giants handle user data and sets a precedent for future legal actions in the realm of data privacy.
The roots of the lawsuit can be traced back to the Cambridge Analytica scandal of 2018, in which the British political consulting firm collected the personal information of millions of Facebook users without first obtaining consent.
Cambridge Analytica paid a Facebook app developer to help them obtain personally identifiable data from roughly 87 million Facebook users. Parties in the US allegedly used the data to influence voter behavior in the 2016 US presidential election, which sparked widespread outrage.
Multiple parties filed lawsuits against Facebook, alleging violations of privacy laws and failure to protect user data. These suits were eventually consolidated into a single class action case in the Northern District of California, overseen by Judge Vince Chhabria.
Facebook Class Action Lawsuit & Settlement: Key Dates & Info
Here’s a breakdown of key events in the case, which spanned from 2018 to 2024:
- 2018: Cambridge Analytica scandal breaks
- 2019: Facebook agrees to pay a $5 billion settlement to address Federal Trade Commission (FTC) rule violations
- 2020: Lawsuits are consolidated into a single class action
- 2022: Preliminary settlement discussions begin
- 2023: Facebook announces the $725 million settlement
- 2024: Plaintiffs file two appeals notices, delaying the payout process
Although the lawsuit started six years ago, it’s still far from a final resolution. Addressing the latest appeals could take another year or more.
Details of the Facebook Class Action Settlement
The $725 million settlement fund is intended to compensate affected Facebook users, cover various legal fees, and support efforts to enhance data privacy. This fund marks a substantial financial commitment from Facebook to address its users’ privacy concerns.
While the settlement amount was significant, millions of Facebook accounts were impacted. The funds will be distributed evenly among all claimants, but if a majority of eligible parties file a claim, each person’s award will be quite small.
The date range for affected parties is exceptionally broad, as the consumer privacy violations spanned over a decade. Anyone who was a Facebook user in the US between May 24, 2007, and December 22, 2022, can file a claim.
It’s unclear whether the settlement administrator will open a new submission window in light of the recent appeals. If this happens, the new deadline will likely be set for late 2024.
While the exact payout amounts will depend on the number of valid claims filed, it’s estimated that users could receive anywhere from a few dollars to a few hundred dollars. The final amount will be determined once all claims are processed and the total number of eligible claimants is known.
Legal Proceedings and Challenges
Judge Vince Chhabria oversaw the case. On October 10, 2023, he signed off on the terms of the agreement during the final approval hearing. Facebook ultimately handed over the money, which was put in a settlement fund. The settlement administrator is Angeion Group. They’re responsible for:
- Creating a website for class members to submit claims
- Collecting and reviewing claim forms
- Determining whether submitted claims are valid
- Dispersing settlement benefits
Despite receiving final approval from Judge Chhabria in late 2023, the Facebook class action lawsuit has yet to conclude. Angeion Group collected documents during the specified submission window, but objectors filed two Notices of Appeals in mid-2024.
According to the Facebook user privacy settlement website, the appeals hearing won’t take place until the “first half of 2025 or later.” Even if those hearings occur on schedule, there’s no guarantee that the matter will be resolved at that time.
Impact on Users and Facebook
The settlement administrator hasn’t yet released final data regarding how many claims they received or validated. These figures will provide insights into the settlement’s impact. Early indications suggest that millions of users have already submitted claims, highlighting the widespread nature of the data privacy breach.
Facebook has already made several changes to its data privacy practices, including enhanced user consent mechanisms, stricter data access controls, and increased transparency about how it leverages user data. Meta has also demystified certain aspects of its Instagram and Facebook algorithms.
The settlement has brought renewed attention to issues of public trust and perception regarding Facebook. While the financial compensation may help mitigate some concerns, the scandal has undoubtedly damaged Facebook’s reputation, prompting users to be more cautious about sharing their personal information on the platform.
Broader Implications of the Class Action Lawsuit
The Facebook settlement sets a significant precedent for future data privacy lawsuits. It demonstrates that the public can hold tech giants accountable for data privacy violations through the imposition of substantial financial penalties.
Class action lawsuits have proven to be an effective mechanism for holding companies of all kinds accountable for data breaches and other failures that negatively impact consumers. They provide a way for affected users to collectively seek redress and push for systematic changes in how user data is handled and protected.
The Facebook class action settlement could also impact how the social media platform and Meta, its parent company, approach technology innovation in the future. Other social media platforms will likely follow suit as they want to avoid such massive settlements like the plague.
The Facebook brand is well-known for its willingness to monetize user data and adopt the latest tech, such as AI algorithms that recommend content. Going forward, it will need to be more mindful of how these changes impact user privacy.
Perhaps most importantly, the settlement has fueled ongoing debates about data privacy and social media platforms’ responsibilities to users. Discussions about the need for stricter regulations and greater transparency may lead to meaningful changes.
Will the Class Action Settlement Mark the Beginning of the End for Facebook?
Probably not. Analysts have been predicting Facebook’s fall for years. However, the company’s profits have continued to skyrocket.
In reality, it’s unlikely that much will change for the social media giant. User trust in the platform and its ability to keep consumer data safe is already abysmally low. Only 18% of Facebook users in the US believe Meta will protect their data, but they say they’ll keep using the platform anyway.
Other Open Class Action Lawsuits
The Facebook class action lawsuit is far from the only scandal involving a major corporation. In fact, it’s not even the only PR nightmare centered around Facebook.
Recently released court documents reveal that Facebook spied on Snapchat users via an initiative called “Project Ghostbusters,” which employed custom software to intercept communications, decrypt confidential information, and use it to gain an edge over Snapchat.
The spy project began targeting Snapchat in 2016. However, Facebook eventually expanded its unlawful surveillance tactics to include YouTube in 2017 and added Amazon to its list of targets in 2018.
Facebook used the data to understand why Snapchat was growing so fast and, subsequently, cloned its core features. These shady tactics allowed Facebook to erode its competitor’s software advantage while simultaneously curtailing its rapid growth.
Here are overviews of two other class action lawsuits that are still open, one of which also involves Facebook and its parent company, Meta.
Crocs
Popular footwear brand Crocs is one of the many major companies to be targeted by class action lawsuits over the last couple of years. The Crocs class action lawsuit centers around the brand’s allegedly shrinking shoes. Plaintiffs also claim that the company has engaged in fraudulent concealment and false advertising.
Think about the last time you saw a Crocs commercial. Chances are that the ad featured people playing outside, hanging out near the water, or basking in direct sunlight. That’s where the false advertising claims come into play.
According to some consumers, Crocs shrink when exposed to hot conditions and too much moisture. However, many of the brand’s ads would lead you to believe that the shoes are made for warm weather and water-based activities. Plaintiffs also accuse the brand of knowing about the shrinkage problem and hiding it from consumers.
The legal proceedings are still ongoing, so it’s unclear whether the company will propose a settlement or take the case to trial. If it enters into a settlement, affected parties within the settlement window will be able to file a claim.
If you’re an avid Crocs wearer, this is one case you should keep a close eye on. You might even be eligible for compensation if you’ve had the casual clogs shrink on you.
Bleacher Report
In another notable case, the popular sports news website Bleacher Report recently agreed to a $4.8 million class action settlement.
The site violated the Video Privacy Protection Act (VPPA) by disclosing personal information of account holders to (you guessed it) Facebook. Bleacher Report relayed personally identifiable data via Meta Pixel without users’ consent.
The company has already taken steps to prevent further violations. Among other things, it’s no longer using the Meta Pixel to collect user data without their consent.
Anyone who had an account with Bleacher Report between January 25, 2021, and May 21, 2024, may be able to file a claim. To be eligible, account holders must have accessed a video through Bleacher Report’s site and logged onto their Facebook account through the same browser during the aforementioned period.
The deadline to file a claim is Tuesday, August 20, 2024.
Like the Facebook lawsuit, the Bleacher Report settlement specifies that funds be disbursed equally among affected parties. The total amount that each user will receive will vary based on how many valid claims are filed.
What’s Next For the Facebook Class Action Lawsuit?
The biggest question mark in the Facebook class action lawsuit centers around the recently filed appeals.
Resolving these issues will take until the middle of 2025 or perhaps even longer. In the meantime, anyone who filed a valid claim will have their cash payout delayed. Once all appeals are resolved, the settlement administrator will begin distributing payout benefits to eligible parties.
If you were a Facebook user during the specified period, pay close attention to new developments in the case. The settlement administrator may open a new filing window, allowing you to file a claim and obtain compensation.
More importantly, you should take the allegations against Facebook as a reminder to be selective about what data you share with social media platforms and other tech products. Remember, you’re the first line of defense against data breaches and unlawful collection of your personal information.