U.S. Markets close in 2 hrs 41 mins

Facebook Has Been Hit By Dozens of Data Lawsuits. And This Could Be Just the Beginning

Jeff John Roberts
Facebook Missed Another Senate Deadline on Privacy Questions

Facebook has cleared two big hurdles as it tries to quell a controversy over user data: First, CEO Mark Zuckerberg came out of a Congressional grilling with flying colors, and then last week the company soothed shareholders by blowing its latest earnings report out of the water.

Despite this good news, Facebook still faces a third ordeal in the form of legal fallout from the Cambridge Analytica affair—which saw a rogue polling agency siphon and sell data from at least 87 million users. And that ordeal has barely begun.

A review of federal court documents shows that Facebook is facing more than three dozen class action lawsuits over Cambridge Analytica. The complaints seek damages on behalf of millions of consumers for alleged misuse of their data, or for investors who allegedly suffered losses when Facebook’s stock plummeted on news of the scandal.

While lawsuits are a matter of course for big companies, Facebook is treating the Cambridge Analytica cases as significant enough to make a special note of them in the company’s quarterly SEC report. A section titled “Legal Proceedings” had previously only cited ongoing litigation over Facebook’s botched 2012 IPO, but now includes the following paragraph (emphasis mine):

Beginning on March 20, 2018, multiple putative class actions and derivative actions were filed in state and federal courts in the United States and elsewhere against us and certain of our directors and officers alleging violations of securities laws, breach of fiduciary duties, and other causes of action in connection with the misuse of certain data by a developer that shared such data with third parties […] the events surrounding this misuse of data became the subject of U.S. Federal Trade Commission and other government inquiries in the United States, Europe, and other jurisdictions. Any such inquiries could subject us to substantial fines and costs, divert resources and the attention of management from our business, or adversely affect our business.

The lawsuits reviewed by Fortune (here’s a sample one) do not list specific dollar amounts, but rather cite damages under grounds like negligence, invasion of privacy, and violation of state consumer protection laws and the federal Stored Communications Act. Others seek recovery for investors, while further ones involve claims from state attorneys general.

Facebook has faced mass consumer lawsuits over privacy violations in the past, and has typically been able to settle them relatively cheaply by paying a few million dollars to nonprofit organizations. Such a quick resolution is unlikely in the case of the Cambridge Analytica scandal, however, given that judges have grown skeptical of settlements that do not deliver direct benefits to consumers, and because of growing scrutiny by government and media of tech companies’ privacy practices.

The worse news for Facebook is that this batch of lawsuits could be just the tip of the iceberg. As tech site The Register reported last week, Facebook’s SEC filing says it anticipates the discovery of “additional incidents of misuse of user data or other undesirable activity by third parties.” In other words, more Cambridge Analytica-style scandals (in which Facebook provided customer data to firms that then misused it) are likely on the way—and could trigger more privacy lawsuits naming Facebook.

“We believe these lawsuits are without merit, and we are vigorously defending them,” Facebook states in its SEC filing describing the Cambridge Analytia lawsuits. The company did not immediately respond to a request for further comment.

Despite its confident pronouncement, it’s far from clear how easily Facebook can weather the legal fallout from Cambridge Analytica. While the company is a profits machine, and is sitting on more than $40 billion in cash, potential payouts to hundreds of millions of users could put a big crimp in its future earnings.

  • These are the bad things about early retirement that no one talks about
    News
    MarketWatch

    These are the bad things about early retirement that no one talks about

    For all the glamour of living an early retirement lifestyle, there are plenty of negatives I’ve come to discover since I permanently left my job in 2012. As a result, you’re repeatedly forced to will yourself into action.

  • Finance
    TheStreet.com

    General Electric Slips as Cowen Suggests Culp Needs to Take Action

    fell on Monday, Oct. 15, after Cowen and Co. cut its price target on the stock as analysts expect the new Chief Executive Larry Culp to take actions to improve the beleaguered industrial's financial standing. Cowen analysts, including Gautam Khanna, said they expect Culp to impose a dividend cut, possibly raise more equity, and reset earnings per share/free cash flow, to shore up the balance sheet.

  • Business
    InvestorPlace

    Should You Buy Micron Stock on the Dip?

    Micron Technology (NASDAQ:MU), which provides semiconductor systems, has had a difficult time since June. While high volatility in the broader technology market is likely to continue for several more weeks, there are two mildly bearish plays in MU stock that I want to share with you, as each play could lead to impressive profits.

  • Sears bankruptcy could make these 5 big companies multi-million-dollar losers
    Finance
    Yahoo Finance

    Sears bankruptcy could make these 5 big companies multi-million-dollar losers

    Signs advertising store closing sales are seen on the doors of a Sears in New Hyde Park, New York, U.S., October 10, 2018. REUTERS/Shannon Stapleton Being an unsecured creditor of Sears (SHLD) right now is not a good place to be. The 125-year old former

  • Bank of America's lagging loan growth overshadows profit gains
    Business
    Reuters

    Bank of America's lagging loan growth overshadows profit gains

    The No. 2 U.S. bank's profit rose 35 percent, helped by cost controls, but investors focused on the underlying businesses. "It was definitely a surprise when some of the other banks had better-than-expected loan growth," said R.J. Grant, head of trading at Keefe, Bruyette & Woods. Bank of America's total loan book grew 0.3 percent to $930 billion during the third quarter compared with the year-ago period.

  • Better Marijuana Stock: Aurora Cannabis vs. Auxly Cannabis Group
    Business
    Motley Fool

    Better Marijuana Stock: Aurora Cannabis vs. Auxly Cannabis Group

    One is market cap: Aurora's market cap is nearly 18 times bigger than Auxly's. Then there's stock performance. Here's how Aurora Cannabis and Auxly Cannabis Group stack up against each other in the areas that do matter.

  • Finance
    Bloomberg

    Tesla Skeptic Surprised by How Much He Enjoyed the Model 3

    In a broader note about positive electric-car momentum, Jonas said he observed workers at Tesla’s lone auto plant in Fremont, California, who were “extremely busy cranking out Model 3s” for delivery in the U.S. He also drove the dual-motor performance version of the vehicle, which he sees as having better value-for-performance than the Model S sedan. “Frankly, our enjoyment of the high-spec version of the Model 3 took us by surprise,” Jonas said, adding that it’s “hard to say how much this matters.

  • Brits Are All Making the Same Joke About the New Royal Baby
    News
    Time

    Brits Are All Making the Same Joke About the New Royal Baby

    Meghan Markle, the Duchess of Sussex, is expecting her first child with Prince Harry. The news, announced Monday morning by Kensington Palace, has already been greeted by hundreds of messages of congratulations for the royal couple on social media. The U.K. is set to leave the European Union on March 29, exactly two years after Prime Minister Theresa May started the formal process for doing so by invoking Article 50 of the Lisbon Treaty.

  • Ford Escape sales are down — here’s how it compares with other small SUVs
    Business
    American City Business Journals

    Ford Escape sales are down — here’s how it compares with other small SUVs

    Sales of the Ford Escape aren't what they used to be. The Escape, made at the Louisville Assembly Plant, saw sales decline by 20 percent in September 2018, compared with the same month last year. Ford and its Lincoln Motor Co. subsidiary have been successful in increasing sales of larger SUVs, such as the Navigator and Expedition this year.

  • Ark Invest CEO: Tesla 'is a replay of Apple'
    Finance
    Yahoo Finance

    Ark Invest CEO: Tesla 'is a replay of Apple'

    Tesla (TSLA) and Apple (APPL) have at least one thing in common – and it’s a big factor leading one analyst to project a price target of $4,000 for the electric vehicle manufacturer. It comes down to the chips, ARK Invest CEO and CIO Cathie Wood said in an interview with Yahoo Finance on Friday. Tesla CEO Elon Musk confirmed in August that the company would be making its own computer chips for automated driving, pivoting away from hardware produced by chipmaker Nvidia (NVDA).

  • 2 Pharmaceutical Stocks to Buy With Dividends of 3% or Better
    Business
    Motley Fool

    2 Pharmaceutical Stocks to Buy With Dividends of 3% or Better

    During a tough week for the overall market, pharmaceutical stocks across the board fell a few notches despite a lack of significant news for the industry itself. Over the past five years, Pfizer has been able to raise its dividend 42% despite declining sales for aging blockbusters that lost patent protection and a sterile injectibles business that suffered major product shortages after it was acquired. Now that the worst is over, a strong product lineup and bulging pipeline could allow America's largest pharmaceutical company to direct a ton of cash toward its shareholders.

  • Is This High-Flying Marijuana Stock the Next Tilray?
    Business
    Motley Fool

    Is This High-Flying Marijuana Stock the Next Tilray?

    Since then, Tilray's share price has skyrocketed to well over six times its opening-day level. At one point, Tilray was up a whopping 856% -- in just two months of trading. Now there's another marijuana stock that is beginning to turn heads.

  • This Is the Average American's Salary. How Does Yours Compare?
    Business
    Motley Fool

    This Is the Average American's Salary. How Does Yours Compare?

    In an age of oversharing, many of us are remarkably tight-lipped when it comes to talking salary. But in reality, knowing where you stand can help you determine whether you're in a good place or whether you should be taking steps to boost your earnings

  • Warren Buffett predicted the fall of Eddie Lampert and Sears over 10 years ago (SHLD, BRK.A, BRK.B)
    Finance
    Business Insider

    Warren Buffett predicted the fall of Eddie Lampert and Sears over 10 years ago (SHLD, BRK.A, BRK.B)

    Sears filed for Chapter 11 bankruptcy early Monday, the culmination of a downward spiral. CEO Eddie Lampert, once called the "next Warren Buffett," will also step down. Incidentally, Buffett predicted the retailer's and Lampert's downfall in 2005.

  • Harris, L3 merging to form $34M defense giant
    Business
    Yahoo Finance Video

    Harris, L3 merging to form $34M defense giant

    Harris Corporation and L3 Technologies are joining together in a ‘merger of equals’ to create a $34M defense giant. Yahoo Finance’s Alexis Christoforous, Brian Cheung, Ethan Wolff-Mann and Melody Hahm dig into what it means for the defense industry.

  • Microsoft Earnings: Mark Your Calendar
    Business
    Motley Fool

    Microsoft Earnings: Mark Your Calendar

    Software giant Microsoft (NASDAQ: MSFT) has continued to impress investors in 2018 amid its ongoing progress becoming a more cloud-centric company. Microsoft reports its first-quarter earnings for fiscal 2019 on October 24. Ahead of Microsoft's earnings release, here's an overview of some of the key areas investors will want to watch. Core to Microsoft's momentum recently is the company's rapidly growing commercial-cloud revenue.

  • Here’s How Prince Harry and Meghan Markle’s Baby Will Change the Line Of Succession
    News
    Time

    Here’s How Prince Harry and Meghan Markle’s Baby Will Change the Line Of Succession

    Prince Harry and Meghan Markle are expecting a baby in spring 2019, Kensington Palace announced Monday morning. Harry and Meghan married in May, becoming the Duke and Duchess of Sussex. Now, the question is where the new arrival will fit into the line of succession of the British royal family.

  • Bank of America Earnings: Better Margins, Strong Asset Quality, and an All-Around Good Quarter
    Business
    Motley Fool

    Bank of America Earnings: Better Margins, Strong Asset Quality, and an All-Around Good Quarter

    Bank of America (NYSE: BAC) is the last of the "big four" U.S. banks to report its third-quarter earnings. Not only did Bank of America beat expectations on both the top and bottom lines, but the business looks pretty solid all around. First, looking at the top and bottom lines, Bank of America did quite well in the third quarter.

  • Merck Is Expected to Record Steady Revenue Growth in Q3
    Business
    Market Realist

    Merck Is Expected to Record Steady Revenue Growth in Q3

    How Merck Is Positioned Ahead of Its Q3 Results Revenue trends Merck has announced it will be presenting its third-quarter revenue and earnings results on October 25. Analysts expect Merck to report revenue of $10.9 billion, primarily supported by Keytruda

  • 2 Hot Marijuana Stocks Listing Soon on U.S. Exchanges -- Are They Buys?
    Business
    Motley Fool

    2 Hot Marijuana Stocks Listing Soon on U.S. Exchanges -- Are They Buys?

    Two marijuana stocks that are currently listed on Canadian stock exchanges soon plan also to list on U.S. stock exchanges. Aurora Cannabis (NASDAQOTH: ACBFF) (TSX: ACB) expects to trade on the New York Stock Exchange (NYSE) by the end of October and Aleafia Health (NASDAQOTH: ALEAF) should soon trade on the Nasdaq stock exchange. Are these hot marijuana stocks that are coming soon to U.S. stock exchanges smart picks to buy now?

  • What Investors Should Know about AT&T’s Growth Prospects
    Business
    Market Realist

    What Investors Should Know about AT&T’s Growth Prospects

    What Investors Should Know about AT&T’s Growth Prospects AT&T’s earnings in Q3 2018 AT&T (T), the second-largest wireless service provider in the United States, is looking to showcase its strength as it nears its third-quarter earnings release. The company

  • It’s Official -- These 5 Social Security Changes Are Coming for 2019
    Business
    Motley Fool

    It’s Official -- These 5 Social Security Changes Are Coming for 2019

    For workers, Social Security's maximum taxable earnings are increasing, and more income will be required to earn a Social Security "credit." Beneficiaries who claimed Social Security early and still work will be happy to learn they'll be able to earn more without a benefit reduction in 2019, and for high earners, the maximum possible Social Security benefit is also on the rise. With all of that in mind, here are the recently released details of these five 2019 Social Security changes. As I mentioned, Social Security beneficiaries are getting a 2.8% COLA starting with their January 2019 benefit payment.

  • What Should Investors Expect When Shopify Reports Earnings?
    Business
    Motley Fool

    What Should Investors Expect When Shopify Reports Earnings?

    E-commerce platform provider Shopify (NYSE: SHOP) has had quite a run since going public three years ago, gaining over 400% compared with the 30% gains of the S&P 500. The biggest contributors have been the recent market rout and fears caused by Shopify's slowing growth. Investors will be keeping a close eye on the numbers when Shopify reports third-quarter results before the market open on Oct. 25.

  • Will Meghan and Harry's Royal Baby Have Dual U.S.-U.K. Citizenship?
    News
    Time

    Will Meghan and Harry's Royal Baby Have Dual U.S.-U.K. Citizenship?

    Kensington Palace announced on Monday that Prince Harry and Meghan Markle are expecting a child in the spring. The announcement comes only five months after the couple married at Windsor Castle in May. With a British father and an American mother, the child might ordinarily expect to be able to apply for dual U.S.-U.K. citizenship, no matter in which country it is born. Under U.S. law, a child born outside of the U.S. and in wedlock can gain U.S. citizenship if its American parent has lived in the United States for at least five years.