WASHINGTON — The Supreme Court allows a billion-dollar class action lawsuit to be filed against Facebook parent company Metaas a result of the privacy scandal involving the Cambridge Analytica political consultancy firm.
The justices heard arguments in November in Meta’s attempt to halt the lawsuit. On Friday, they decided it was wrong to take the case at all.
The Supreme Court rejected the company’s appeal and upheld an appeal ruling that allowed the case to proceed.
Investors claim Meta has not fully disclosed its risks The personal data of Facebook users would be misused by Cambridge Analytica, a company that supported Donald Trump ‘s first successful Republican presidential campaign in 2016.
Inadequacy of disclosures led to two significant drops in the price of the company’s stock in 2018 after the public learned about the extent of the privacy scandal, the investors say.
Meta has already paid a $5.1 billion fine and reached a $725 million privacy settlement with users.
Cambridge Analytica had ties to Trump’s political strategist Steve Bannon. It had paid a Facebook app developer for access to the personal information of about 87 million Facebook users. That data was then used to target American voters during the 2016 campaign.
The lawsuit is one of two high court cases involving class action lawsuits against tech companies. The judges are also grappling with the question of whether to halt a class action Nvidia. Investors say the company misled them about its reliance on the sale of computer chips to mine volatile cryptocurrency.