Facebook must face DC attorney general's lawsuit tied to Cambridge Analytica scandal

By Mike Scarcella

July 31 (Reuters) - Meta’s Facebook must face a consumer protection lawsuit brought by the District of Columbia's attorney general accusing the social media giant of misleading consumers about its data-privacy practices, an appeals court ruled on Thursday.

The District of Columbia Court of Appeals revived the District’s lawsuit for now in a unanimous three-judge ruling, finding that a lower court judge applied the wrong legal standard in dismissing the case in 2022.

The District’s lawsuit was part of a wave of court and regulatory actions stemming from revelations in 2018 that Facebook had allowed the now-defunct British political consulting firm Cambridge Analytica to access data from as many as 87 million users. The consultancy's clients included President Donald Trump's 2016 election campaign.

Facebook has denied any wrongdoing, and said that it made clear and appropriate disclosures to users about its privacy policies. It still can seek dismissal of the lawsuit.

In a statement, Facebook said it was weighing its options and remained confident it will prevail.

D.C. Attorney General Brian Schwalb in a statement called the decision a "significant victory." He said Meta "misled District residents and failed to protect their privacy, representing to users that protecting their privacy was paramount."

The District’s lawsuit accused Facebook of duping users into thinking the company had strong enforcement measures to audit third-party applications. The lawsuit said Facebook allowed third parties like Cambridge Analytica to harvest user data without consent on a widespread basis.

In the lower court ruling, Judge Maurice Ross of the Superior Court for the District of Columbia concluded that "Facebook did not materially mislead consumers as to their response to Cambridge Analytica."

The appeals court said the attorney general should have a lower burden of proof in making renewed arguments that Facebook made unintentionally misleading claims to the platform’s users about their control over their information shared on the site.

Meta chief executive Mark Zuckerberg and current and former directors and officers of the company this month agreed to settle claims seeking $8 billion for alleged damage caused by allowing repeated violations of Facebook users' privacy. The accord, filed in the Delaware Court of Chancery, did not disclose a settlement amount.

Facebook in 2022 said it would pay $725 million to resolve a class action in federal court in California over the Cambridge Analytica scandal.

In 2019, Facebook agreed to pay a record-breaking $5 billion fine to resolve a U.S. Federal Trade Commission probe into its privacy practices.

The case is District of Columbia v. Facebook, District of Columbia Court of Appeals, No. 23-CV-0550.

For plaintiff: Jeremy Girton of D.C. attorney general's office

For defendant: Joshua Lipshutz of Gibson, Dunn & Crutcher