The Supreme Court has decided to allow a significant class action lawsuit against Meta, the parent company of Facebook, to move forward. This lawsuit originates from the privacy issues linked to the Cambridge Analytica scandal, a political consulting firm that gained notoriety during the 2016 U.S. presidential race.
In November, justices considered Meta’s request to dismiss the lawsuit. However, on Friday, they acknowledged an error in their initial decision to take on the case.
The Court has rejected Meta’s appeal, thereby upholding a previous appellate court’s decision that permits the lawsuit to continue.
Investors claim that Meta failed to adequately inform them about the risks associated with the misuse of Facebook users’ personal data by Cambridge Analytica. This firm played a role in Donald Trump’s first presidential campaign, which was victorious in 2016.
According to the investors, the lack of transparency regarding these risks resulted in two significant declines in Meta’s stock price during 2018, following revelations of the extent of the company’s privacy violations.
In addition to the ongoing litigation, Meta has already faced financial repercussions, including a hefty $5.1 billion penalty and a $725 million settlement with users affected by the privacy breach.
Cambridge Analytica is reportedly connected to Steve Bannon, a political strategist for Trump. The firm paid an app developer for access to personal information from approximately 87 million Facebook users, using this data for targeted political advertising in the 2016 election.
This lawsuit represents one of two cases concerning class-action lawsuits against large technology firms currently under review by the Supreme Court. The justices are also deliberating over another class action involving Nvidia, where investors allege that the company misled them about its reliance on sales of microchips for cryptocurrency mining, a market known for its instability.
