Supreme Court To Decide Fate Of Facebook In Massive Data-Harvesting Scandal

The US Supreme Court will decide Facebook’s fate in a massive data-harvesting scandal following a class-action lawsuit alleging that Meta gave up to 87 million customers’ personal information to other parties, including Cambridge Analytica, on June 10.

Supreme Court To Decide Fate Of Facebook In Massive Data-Harvesting Scandal 1

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On June 10, the Supreme Court decided to examine a sizable shareholder case alleging that Facebook’s parent company, Meta Platforms Inc., misled investors about a crisis involving the political consulting firm Cambridge Analytica and data harvesting.

Supreme Court To Decide Fate Of Facebook In Massive Data-Harvesting Scandal 2
The U.S. Supreme Court in Washington on May 29, 2024. (Madalina Vasiliu/The Epoch Times)

Future corporate disclosure regulations may be impacted by the Supreme Court’s decision in this case.

According to Facebook’s filing with the country’s top court, the complaint comprises a class action connected to private securities fraud that stems from the “wrongful acquisition and misuse of Facebook user data” by the now-defunct UK company Cambridge Analytica.

To resolve a class-action lawsuit alleging that Meta gave up to 87 million customers’ personal information to other parties, including Cambridge Analytica, the business agreed to pay out $725 million in December 2022. The incident was made public in 2018.

To target and profile voters, Cambridge Analytica previously worked for Donald Trump’s successful 2016 presidential campaign. They have access to personal information from millions of Facebook accounts. The account holders’ data was collected by an app without their permission.

Government investigations resulted from the issue, and Mark Zuckerberg, the CEO of Meta, was asked to testify before Congress.

2019 saw Facebook agree to pay $100 million to settle a Securities and Exchange Commission action alleging it deceived investors about the misuse of their data, as well as $5 billion to conclude a Federal Trade Commission investigation into the company’s privacy policies.

The European Union is currently looking into Meta for potential violations of kid safety regulations on its Facebook and Instagram accounts.

In an unsigned order, the Supreme Court granted the petition for certiorari, or review, in the case of Facebook Inc. v. Amalgamated Bank.

Justices did not dissent, and the court did not explain its ruling. For the petition to proceed to the oral argument stage, at least four of the nine justices must vote in favor of granting it.

The multibillion-dollar lawsuit, which is based on claims that Facebook, as the company was known at the time, inflated share prices by failing to provide adequate disclosure that its user data would be misused, will be examined by the Supreme Court to determine whether a federal appeals court erred in permitting it to proceed.

The investors assert that the company lost over $200 billion in market value as a result of two price declines in 2018 that were triggered by the scandal.

In October 2023, the U.S. Court of Appeals for the 9th Circuit rendered a decision against Facebook in the relevant case.

Facebook is requesting that the lawsuit be dismissed by the Supreme Court.

Facebook claimed in its petition that the plaintiffs “adopted extreme outlier positions,” but the 9th Circuit reinstated the allegations after the federal trial court rejected them three times.

“The Ninth Circuit’s decision will light a beacon for class-action lawsuits that would be dismissed in any other circuit,” the petition stated.

Amalgamated Bank, the respondent, said that the circuit court’s ruling was sound and that the appeal ought to be dismissed by the Supreme Court.

“There is no circuit conflict,” the bank said in a brief.

“A statement is misleading if it treats a material risk as hypothetical when the risk has already materialized,” according to the 9th Circuit, which “applies the same rule as the other circuits Facebook cites.”

In its next October term, the Supreme Court is anticipated to consider Facebook Inc. v. Amalgamated Bank.

The judges of the Supreme Court are now considering two cases involving social media platforms.

The arguments made by the states on March 18 that the federal government erred in informing social media platforms about public health concerns during the recent pandemic were met with skepticism by the Supreme Court justices.

Simultaneously, at the oral argument in Murthy v. Missouri, the states contended that social media companies were coerced by the federal government to suppress dissenting opinions on significant public matters, including the COVID-19 vaccine’s side effects and government-mandated lockdowns. The states contended that exerting such pressure would be unlawful under the First Amendment.

The US Surgeon General is Dr. Vivek Murthy. The federal government was sued by the state of Missouri and other parties for allegedly engaging in censorship by coercing social media companies to remove certain information.

Florida and Texas informed the Supreme Court on February 26 that they need to have the authority to control how social media companies filter material. The judges appeared to be reaching for a new rule during oral arguments so they could apply free speech principles to online discussions.

Both the freedom of individual Americans to express themselves online and the editorial discretion of social media companies over what content they post are in jeopardy. The First Amendment of the United States Constitution guarantees both rights.

Moody v. NetChoice LLC challenges the Florida statute governing social media, and NetChoice LLC v. Paxton challenges the Texas law.

The rules in both states restrict the deplatforming of users and require platforms to explain their content moderation decisions—a requirement that the platforms find unduly onerous.

A portion of the Florida Act was invalidated by the U.S. Court of Appeals for the 11th Circuit, which concluded that “with minor exceptions, the government can’t tell a private person or entity what to say or how to say it.”

The First Amendment safeguards the rights of “private actors,” including the “biggest” platforms, “and their so-called content-moderation decisions constitute protected exercises of editorial judgment.”

In contrast, the U.S. Court of Appeals for the 5th Circuit upheld Texas’ constitutionality and rejected the notion that businesses had an unrestricted First Amendment right to silence critics.

We anticipate hearings in these two matters by the end of June.

Last year, GreatGameIndia reported that as a consequence of Facebook’s alleged lack of cooperation with the state police in an investigation involving an imprisoned Indian citizen in Saudi Arabia, the Indian state of Karnataka threatened to shut down Facebook’s operations.

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