The class action lawsuit claimed that Facebook gave third parties access to user data without their consent.
The settlement is the largest recovery ever achieved in a data privacy class action and the most Facebook has ever paid to resolve a private class action.
The class action lawsuit was started after it was revealed that the information of 87 million users was shared with Cambridge Analytica.
The case was expanded to include Facebook's data sharing practices. The law firm behind the lawsuit said that Facebook gave numerous third parties access to their Facebook content and information without their consent.
The settlement needs to be approved by judges in the Northern District of California.
It was in the best interest of our community and shareholders to pursue a settlement. A Meta spokesman told CNBC that the company has changed its approach to privacy over the past three years. As part of the settlement, the company didn't admit wrongdoing.
Regulators around the world are scrutinizing Facebook's data practices in the wake of the Cambridge Analytica scandal.
The Federal Trade Commission opened a probe into Facebook over concerns that the social media firm had violated the terms of a previous agreement with the agency which required it to give users clear notifications when their data was being shared with third parties.
The FTC settled with Facebook for $5 billion. Facebook agreed to pay $100 million to settle a case with the SEC over allegations the company made misleading disclosures about the risk of misuse of user data.
Cambridge Analytica was accused of using data from Facebook to influence political campaigns.
Cambridge Analytica executives were filmed by Channel 4 News suggesting that they would use sex workers, bribes, ex-spies and fake news to help candidates win votes.
Facebook changed its name to Meta to reflect its ambitions to become a leader in the metaverse. One of the largest social media firms is run by Meta.
Changes to Apple's privacy rules and rising competition from TikTok are some of the reasons why Facebook's growth has slowed.
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