The U.S. Supreme Court has declined to block a major class action lawsuit against Meta, allowing investors to proceed with claims related to Facebook's Cambridge Analytica data privacy scandal.
The lawsuit alleges that Meta, Facebook's parent company, failed to properly inform investors about risks associated with how users' personal data could be mishandled. The case specifically focuses on Cambridge Analytica's unauthorized access to personal information of approximately 87 million Facebook users during the 2016 U.S. presidential campaign.
The Supreme Court initially agreed to hear Meta's appeal seeking to stop the lawsuit. However, after November's oral arguments, the justices reversed course and dismissed the appeal, effectively allowing the case to continue in lower courts.
Investors claim Meta's inadequate disclosure of privacy risks led to two major drops in the company's stock price in 2018, when details about Cambridge Analytica's data harvesting became public. The political consulting firm, which had connections to Trump campaign strategist Steve Bannon, obtained user data through a Facebook app developer and used it for voter targeting.
Meta expressed disappointment with the Court's decision. Company spokesman Andy Stone defended Meta's position, stating, "The plaintiff's claims are baseless and we will continue to defend ourselves as this case is considered by the District Court."
The company has already faced substantial financial penalties related to the privacy breach, including a $5.1 billion fine and a $725 million settlement with affected users. This latest class action could potentially result in billions more in damages if investors prevail.
The case represents one of two major class action lawsuits against technology companies currently being considered at the Supreme Court level, with the other involving cryptocurrency-related claims against Nvidia.