$725M Facebook Settlement: 500K Claims Rejected Before Final Payouts

Facebook's parent company, Meta, agreed to settle a class-action lawsuit.

Facebook settlement: A Facebook logo on a stack of money.
(Image credit: Getty Images)

Half a million claimants to the ongoing $725 million Facebook privacy settlement have received rejection letters in recent weeks, according to The Hill. These 500,00 rejections come as settlement administrator Angeion continues to sort through the  historic 28 million claims. This painstaking review and any claimant appeals of the final judgement are the only remaining hurdles before the distribution of settlement payouts.

On October 10, The Hill reported U.S. District Judge Vince Chhabria's final approval of the Facebook data privacy settlement. Facebook users who were active on the platform between 2007 and 2022 were eligible to submit claims until August 25 of this year.

Plaintiffs' co-counsel Lesley Weaver claimed the 28 million applications is "the largest number of claims ever filed in a class action in the United States." Law360 reported that Chhabria said he was "blown away" by the massive number of claims.

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Follow us down the long road that led to this moment for Facebook — and learn what users affected by the settlement can expect going forward.

Who's eligible for a payout?

The settlement page states that anyone who was a U.S. Facebook between May 24, 2007, and December 22, 2022, is eligible. Claimants don't need to prove that their data was obtained by third party. 

The Pew Research Center reported in 2021 that 69% of Americans have used Facebook at some point. And Statista estimates the total number of U.S. Facebook users at 243 million in 2023. So the 28 million and counting claimants are equivalent to nearly 9% of all U.S. Facebook users.

Can I still claim part of the $725 million?

The claim submission phase is now closed. All valid claims had to be submitted electronically on the claim submission webpage by August 25. Submissions sent by postal mail had to be postmarked by August 25 to be counted as valid.

How Facebook got here

According to the Associated Press (AP), the lawsuit stems from the discovery of Facebook's Cambridge Analytica debacle. As reported jointly by the New York Times, the Observer of London, and The Guardian in April 2018, data firm Cambridge Analytica paid a Facebook app developer to gain access to 87 million Facebook users' personal data. The data was converted into detailed voter profiles used to target U.S. voters on behalf of Donald Trump's 2016 presidential campaign.

After the revelations, Mark Zuckerberg attempted damage control during testimony in front of frosty congressional panels. Many users deleted their Facebook accounts. Facebook suffered serious blows to its perception as a trustworthy custodian of people's personal data and communications. 

On March 21, 2018, a Facebook user in Maryland filed a proposed class action lawsuit on behalf of affected platform users like herself, as reported by CNN. The original plaintiff's case was eventually merged with seven similar lawsuits into a single class action. After several years of litigation, the parties agreed to a temporary settlement agreement on August 27, 2022, according to the AP, just a few weeks before a deadline for Meta CEO Mark Zuckerberg and COO Sheryl Sandberg to sit for legal depositions. 

Facebook formally agreed to a $725 million payout on Dec. 23, 2022, and a federal judge issued issued a tentative approval in late March 2023. 

Reuters reported on July 20 that the tentative deal faced formal opposition from a growing number of class members ahead of a final September 7 hearing before Chhabria. Dozens of legal objections were filed, including an objection from two Facebook users who claimed the plaintiffs' attorneys legal fees (up to $181 million) were too high, while the stipulated compensation for class members was too low.

In a July 11 court filing, the plaintiffs' attorneys responded that the objections were  a "tiny percentage" of the estimated class of 250 million U.S. Facebook users.

On October 10, Chhabria issued final approval of the $725 million settlement. The Hill reported that affected parties have until November 9 (30 days after  the judge's order) to file appeals against the judgement.

Average user payout

There are several factors that will determine the size of your payout: 

  1. As with most class action lawsuits, your payout hinges heavily on how many users remember to claim their piece of the pie. More than 28 million initial Facebook claims have been whittled down to just over 17 million legitimated claims, with 1 million left to review for duplicates or fraud before the final tally.
  2. How long have you been active on Facebook? Most long-term users are slated for the largest payouts, based on their data being exposed to Facebook's shoddy privacy controls for a longer duration.  
  3. Before any users get their money, plaintiffs' attorneys and settlement administrators will extract fees often reaching 25% of any settlement fund. Indeed, Fortune reports that Facebook plaintiffs' attorneys have requested a whopping $180 million in legal fees. In the September 7 court hearing, Chhabria noted that this fee request resembles "Nick Bosa money," a reference to the lucrative new contract of the highest-paid defensive player in the National Football League.
  4. In the latest court hearing, plaintiffs' attorneys estimated that class members on average will receive roughly $30 each, according to The Hill.

Payout timelines

Following Chhabria's final approval, claimants will need wait for payouts until potential appeals are exhausted, the claims site explains.

The judge's order estimates that payments will commence "90 days after the effective date [October 10]". 

So be on the lookout for payments starting roughly January 8, 2024, but don't write any checks with that money just yet.

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Ben Demers
Audience Engagement Manager, Kiplinger.com

Ben Demers manages digital content and engagement at Kiplinger, informing readers through a range of personal finance articles, e-newsletters, social media, syndicated content, and videos. He is passionate about helping people lead their best lives through sound financial behavior, particularly saving money at home and avoiding scams and identity theft. Ben graduated with an M.P.S. from Georgetown University and a B.A. from Vassar College. He joined Kiplinger in May 2017.