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Facebook to Begin Issuing Payments in $725 Million Settlement

Strategic Insights

— 1 min read

Millions of Facebook users who were eligible for a claim in the $725 million privacy settlement may soon receive their payment, with the settlement's administrator stating that payouts could be issued within weeks. The settlement stems from lawsuits that accused Facebook of improperly sharing users' personal data with advertisers and third-party firms, with the 2018 Cambridge Analytica scandal remaining the most significant one. Cambridge Analytica, a company owned by the hedge fund billionaire Robert Mercer and headed by Trump's key adviser Steve Bannon, used personal information taken without authorization in early 2014 to build a system that could profile individual US voters, in order to target them with personalized political advertisements.

Key Takeaways:

  • The $725 million settlement was agreed upon by Meta, Facebook's parent company, to resolve claims that the social media platform misused user data.
  • The settlement stems from lawsuits that accused Facebook of improperly sharing users' personal data with advertisers and third-party firms.
  • The 2018 Cambridge Analytica scandal remains the most significant one, where Cambridge Analytica used personal information taken without authorization to build a system that could profile individual US voters.
  • The settlement is expected to issue payments to millions of users who had an active Facebook account between May 2007 and December 2022.
  • Eligible users needed to file a claim in the lawsuit by August 25, 2023, to receive a payment.
  • The average payout will be around $29.43, with the highest amount capped at $38.36 for users who were active on the platform throughout the entire 15-year period.
  • A system of "allocation points" will be used to calculate individual shares, giving more to users with longer usage histories.

Statistics:

  • $725 million: the total settlement amount agreed upon by Meta.
  • $275 million: the amount for the individual payout to eligible users.
  • $29.43: the average payout per eligible user.
  • 15 years: the period between May 2007 and December 2022, during which eligible users had an active Facebook account.
  • $38.36: the highest payout amount for users who were active on the platform throughout the entire 15-year period.
  • 75 days: the period over which the settlement payments will be issued in waves.

Sources:

  • USA Today
  • Times Content
  • Court filings

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