This article from the Associated Press discusses a lawsuit filed by Meta Platforms Inc. (formerly Facebook) shareholders against the company and its executives, including Mark zuckerberg.
Here’s a breakdown of the key points:
The Lawsuit’s Core Allegation: Shareholders claim that Meta failed to adequately disclose the risks associated with the misuse of Facebook users’ personal facts by Cambridge Analytica, a political consulting firm that worked with Donald Trump’s 2016 presidential campaign.
Violation of FTC Consent Order: The lawsuit alleges that Facebook repeatedly violated a 2012 consent order with the Federal Trade Commission (FTC). This order required Facebook to stop collecting and sharing user data without consent.The lawsuit claims Facebook sold user data to commercial partners and removed required privacy disclosures.
Financial Consequences for Meta: As a result of these issues,Meta agreed to a $5.1 billion penalty from the FTC. The company also faced important fines in Europe and a $725 million privacy settlement with users.
Shareholders’ Demand: The shareholders are seeking to have Zuckerberg and other executives reimburse Meta for the FTC fine and other legal costs, which they estimate to be over $8 billion.
Testimony:
Neil Richards (Privacy Expert): Testified that Facebook’s privacy disclosures were misleading.
Jeffrey Zients (Former Board Member): Stated that consumer privacy and user data were priorities for management and the board. He supported settling with the FTC to allow the company to move forward, despite the cost. He also stated there was no indication Zuckerberg had done anything wrong and that he was “essential” to running the company.
Upcoming Testimony: The trial is expected to include testimony from mark Zuckerberg and former COO Sheryl Sandberg, as well as board members Marc Andreessen and Peter Thiel.
Supreme Court Involvement: Meta had hoped the Supreme Court would dismiss the case, but the court declined to hear their appeal, allowing the lawsuit to proceed.
Timeline: The case is expected to last through late next week, with a ruling from the judge not expected for several months.
