Supreme Court Greenlights Massive Multibillion-Dollar Class Action Lawsuit Against Meta.
In a landmark decision that could have far-reaching implications for tech giants, the U.S. Supreme Court has paved the way for a multibillion-dollar class-action lawsuit against Meta, the parent company of Facebook and Instagram. The case, which alleges significant privacy violations and data misuse, marks a critical moment in the ongoing battle over corporate accountability in the digital age. With billions of dollars on the line, the ruling sends a clear message: even the most powerful tech companies are not above the law.
This lawsuit arises from the privacy issues linked to the Cambridge Analytica political consulting firm. In November, the justices reviewed arguments regarding Meta's attempt to dismiss the lawsuit.
On Friday, they concluded that their initial decision to consider the case was erroneous. The court rejected Meta's appeal, thereby upholding an appellate court's ruling that allows the lawsuit to proceed. Investors contend that Meta failed to adequately disclose the risks associated with the potential misuse of Facebook users' personal data by Cambridge Analytica, a firm that played a role in Donald Trump's successful 2016 Republican presidential campaign.
Related: Ubisoft Sued: Class Action Over Alleged Customer Data Sharing with Meta
According to the investors, the lack of proper disclosures resulted in two significant declines in the company's stock price in 2018, following revelations about the privacy scandal. Meta spokesperson Andy Stone expressed disappointment with the court's decision, stating, "The plaintiff’s claims are baseless, and we will continue to defend ourselves as this case is considered by the District Court."
Meta has previously paid a $5.1 billion fine and reached a $725 million settlement regarding privacy issues with users. Cambridge Analytica had connections to political strategist Steve Bannon and had compensated a Facebook app developer for access to the personal data of approximately 87 million users, which was subsequently utilized to target voters during the 2016 election. This lawsuit is one of two significant cases before the Supreme Court concerning class-action lawsuits against technology companies.
The justices are also deliberating on whether to dismiss a class action against Nvidia, where investors allege the company misrepresented its reliance on sales of computer chips for cryptocurrency mining.
