Is the Facebook settlement a scam? Or is it for real? Here’s what you need to know

Meta Platforms, previously known as Facebook, decided to pay a jaw-dropping $725 million in December 2022 to settle a class-action lawsuit.

The crux of the legal action alleged the company's negligence in safeguarding user data, which subsequently found its way to Cambridge Analytica, a consultancy linked to Donald Trump's 2016 presidential campaign.

Up until August 2023, Facebook users could have taken part of the settlement, and eventually claimed monies from the complex suit. 

Here's what you need to know.

The Facebook settlement details

In December 2022, court documents were made public, delineating the terms of a monumental $725 million settlement. A San Francisco federal court judge issued a tentative approval in March 2023.

The origins of the Facebook class-action lawsuit

On March 21, 2018, a Facebook user in Maryland submitted a lawsuit on behalf of herself and other platform users. The original plaintiff's case was later merged with similar lawsuits into a single class action suit. According to CNN's account, "Data analytics company Cambridge Analytica collected information about 50 million Facebook users through a Facebook survey, and used that information to try and influence voters in the 2016 US presidential election."

The complaint noted, "Facebook had known about this security breach for two years, but did little or nothing to protect its users."

An article on the Nasdaq site shared, "Anyone who was a Facebook user in the United States between May 24, 2007, and Dec. 22, 2022, is eligible. You don't have to prove that your data was obtained by any third party."

The parties eventually agreed to a temporary settlement arrangement on August 2022, per the AP. That came a few weeks prior to a deadline for Meta CEO Mark Zuckerberg and COO Sheryl Sandberg to sit for controversial legal depositions.

The suit included revelations that Cambridge Analytica had illicitly gained personal details of at least 87 million Facebook users, detailed in The Great Hack documentary.

This data, acquired from a third-party app developer associated with Facebook, was instrumental in strategizing voter outreach during Trump's successful presidential run. According to the Daily Dot's coverage, emails also revealed knowledge that Facebook employees had understood the undertaking.

The public backlash

The scandal catalyzed a global furor, leading to Zuckerberg being interrogated by U.S. legislators in a widely-broadcast Congressional hearing. The AP story noted "Zuckerberg batted away often-aggressive questioning," and the controversy prompted many to at least consider deleting their Facebook accounts, though as another AP story noted, "There isn’t much of anywhere else to go" considering the social media giant's massive reach.

How do you participate in the lawsuit?

Many Facebook users, alarmed at the breach, pondered how they could be part of this lawsuit. Users received emailed notifications informing them of their potential involvement. Legal teams urged individuals to keep a record of these notifications and to register their interest on dedicated websites set up for this purpose. Seminars and webinars were also organized, offering guidance on how to navigate the complex claim process.

The cut-off for being part of the payout was late August 2023, will the payout each claimant will eventually receive dependent on several factors:

1. The number of valid claims filed.
2. The claimant's Facebook usage duration within the specified period.
3. The final net settlement fund after deducting various costs.

In essence—attorneys fees notwithstanding—each month a claimant had an active Facebook account during the mentioned period, they were assigned a point.

The total value of all the points was then used to divide the net settlement amount, determining the pay per point. Using a simplified example, if the entire fund was $100 and there were 500 points, each point would be worth 20 cents. Thus, a user active for 52 months would receive $10.40, while someone active for the full 187 months would get $37.40.

Actual payment on the claim is unknown at this point. The claim site states: "Settlement payments will be distributed as soon as possible if the court grants final approval of the settlement and after any appeals are resolved."

A Tech.co article noted individual payouts could be in the $7 range.

What does the Facebook settlement mean for Facebook?

The litigants in this lawsuit endeavored to gain class-action status, thereby representing the myriad of Facebook users whose data had been compromised. The suit boldly posited that Facebook, apart from its social networking facet, operated as a "data broker and surveillance firm." Facebook, though, claims no fault through the payout.

Meta Platforms issued a statement justifying the settlement as aligning with the best interests of their global community and investors.

Dina El-Kassaby Luce, speaking on behalf of the company in December, said according to NPR, "Over the past three years, our emphasis on privacy has undergone a radical transformation. We've launched a comprehensive privacy initiative." She further pledged the Meta's unwavering commitment to creating services that resonate with users, ensuring privacy remains paramount.

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