Facebook (FB)-parent Meta has agreed to pay $90 million to settle a decade-old class action lawsuit over a practice that allowed the social network to track users’ activity across the internet, even if they had logged out of the platform.
The settlement, announced on Tuesday, is one of the largest in the history of the social media company, but it’s unlikely to impact the bottom line of the $590 billion internet giant. If approved, the agreement will also rank among the 10 largest data privacy class action settlements in the United States, according to DiCello Levitt Gutzler, one of the law firms involved in bringing the case.
“Reaching a settlement in this case, which is more than a decade old, is in the best interest of our community and our shareholders and we’re glad to move past this issue,” Meta spokesperson Drew Pusateri said in a statement to CNN Business. The company has denied any wrongdoing as part of the deal.
The case, filed in 2012, dates back to a 2010 update by Facebook called “Open Graph,” which was designed to give users’ friends a closer look at their activity and interests across the internet. As part of the update, the company launched a “Like” button plug-in on sites across the internet, which users could hit to highlight their interests to their Facebook networks.
The “Like” button plug-in also allowed Facebook to gather data, using cookies, about users’ activity on that site — including, for example, what sites they visit, items they viewed or purchased, and communications they had with that site — regardless of whether the user actually used the button or even knew it was there, according to court documents.
To alleviate privacy concerns, the company said at the time that it would not collect user-identifying cookies about a user’s activity on partner websites while they were logged out of Facebook. However, researchers found that Facebook continued to collect some identifying cookies on users’ internet activity even after they logged out of the platform, contrary to its promise. After the issue was publicized in 2011, Facebook initially defended the practice but later issued a fix and clarified its policies. The class members in the case accused the company of breach of contract.
The legal battle dragged on for years. In 2017, after the plaintiffs had submitted a third updated complaint, a judge granted Facebook’s motion to dismiss the case. Plaintiffs appealed the dismissal and in 2020, the US Court of Appeals for the Ninth Circuit partly reversed the decision. Facebook appealed the decision to the Supreme Court, which declined to hear the case, opening the door for the parties to begin negotiating the settlement.
The settlement applies to US Facebook users who had an account between April 22, 2010, and September 26, 2011, and who visited non-Facebook websites that displayed the “Like” button, a list that included everything from Pandora to ESPN.
As part of the settlement, Meta agreed to delete the user data it collected through this practice.
“It’s truly a wake-up call for internet and advertising companies who collect user data and use advanced browser tracking,” Stephen Grygiel, one of the lead attorneys representing the class members, said in a statement about the settlement.