Meta Platforms (NASDAQ:META) has finally agreed to settle a four-year-long drawn class-action lawsuit that sought damages from Facebook for allowing third parties, including Cambridge Analytica, to access and exploit the private information and data of end-users. Shares of the social-media giant are down 1.5% in the early trading hours today.
Details of the Lawsuit
The lawsuit alleged that Cambridge Analytica, a British political consulting firm, had collected and exploited personal data belonging to millions of Facebook users without their consent.
Both Facebook and Cambridge Analytica denied the allegations filed over the 2018 Cambridge Analytica scandal. The companies stated that they did not engage in any wrongdoing. Later in 2018, Cambridge Analytica declared bankruptcy and was shut down.
According to a court filing on Friday, Meta agreed to pay the fines in the U.S. as well as the U.K in relation to the alleged lawsuit.
Further, both parties have requested the court to put the class-action lawsuit on hold for 60 days, allowing them time to finalize the settlement.
Is Meta a Good Stock to Buy?
On TipRanks, analysts are cautiously optimistic about Meta stock, which has a Moderate Buy consensus rating based on 27 Buys, five Holds, and two Sells. Meta Platforms’s average price forecast of $224.21 implies 38.59% upside potential.
Final Thoughts
Meta Platforms may have to pay a very hefty amount in damages in the coming days, depending on the terms of the agreement that will be made public in the next 60 days or, maybe, before the company’s third-quarter earnings, which are slated to release on November 2.
Read Full Disclosure
