Meta investors appeal to revive Cambridge Analytica fraud case

Meta Platforms investors have formally asked a U.S. appeals court to reinstate a proposed class-action lawsuit alleging that Facebook’s parent company concealed a serious privacy violation that allowed a company to private political consultant collects users’ personal information.

The request came during oral arguments on Wednesday before the 9th US Circuit Court of Appeals in San Francisco over the Cambridge Analytica scandal, where the data of up to 87 million users was accessed.

Investors think that Facebookas the company is aware, misled them in 2016 by describing the data breach as just a “risky” knowing that Cambridge had accessed user data.

Investors said they suffered losses in July 2018 when Facebook’s stock price fell after the company said user growth slowed after the extent of the breach became public.

US District Judge Edward Davila ruled in 2020 that Facebook’s claims were not false because Cambridge’s use of data was reported in 2015.

During Wednesday’s hearing, investors’ attorney Tom Goldstein told the three-judge panel that Davila’s ruling should be overturned because Facebook downplayed the bulletin and did not take strong action.

metaJoshua Lipshutz’s attorney countered that the company had fully disclosed that cyberattacks had occurred and will occur in the future.

Circuit Judges Margaret McKeown and Jay Bybee were skeptical, calling the disclosures “summaries” and suggesting they may not make sense for investors.

“If they had a scam by some 18-year-old sitting in his parents’ basement, it’s true,” Bybee said. “But it’s not helpful considering the nature of the leak to Cambridge.”

Lipshutz replied that even if there were errors, investors would still have to prove that Meta had wrong intentions.

“It doesn’t make sense for the company to be trying to mislead the public about what the public already knows,” he said.

Facebook has paid more than $5 billion (nearly Rs 41,270) in fines to US authorities for Cambridge Analytica. It agreed to pay $725 million (nearly 6,000 rupees) to settle a Facebook user lawsuit in December.

© Thomson Reuters 2023

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