Meta Executives Settle $8 Billion Privacy Lawsuit
Zuckerberg and Directors Agree to Terms as Trial Commences
Meta CEO **Mark Zuckerberg** and other current and former company directors have reached a settlement in a sweeping shareholder lawsuit. The agreement resolves claims alleging widespread privacy violations on Facebook, potentially costing the company billions.
Key Allegations Addressed
Shareholders initiated legal action against **Zuckerberg**, venture capitalist **Marc Andreessen**, former COO **Sheryl Sandberg**, and other officials. They sought to hold these individuals personally liable for substantial fines and legal expenses incurred by the company due to data protection failures.
The suit cited the $5 billion fine Facebook paid the Federal Trade Commission in 2019 for not adhering to a 2012 data privacy agreement. Plaintiffs argued that executives should reimburse Meta using their personal assets for these costs.
Settlement Reached Pre-Trial
The resolution was announced Thursday before Delaware Court of Chancery Vice Chancellor **Kathaleen McCormick**. The trial was abruptly adjourned on its second day as the settlement discussions concluded. **McCormick** congratulated the involved parties on the agreement.
Plaintiffs’ counsel, **Sam Closic**, described the settlement as a rapid development. Key figures like **Marc Andreessen** and **Sheryl Sandberg** were slated to testify during the proceedings, which were scheduled to last through the end of the following week.
The case stemmed from revelations concerning the misuse of data from millions of Facebook users by Cambridge Analytica. This political consulting firm, now defunct, worked with **Donald Trump’s** 2016 presidential campaign, leading to the record FTC penalty.
Missed Opportunity for Public Reckoning
Jason Kint, head of Digital Content Next, expressed disappointment with the settlement’s swiftness. He stated, “This settlement may bring relief to the parties involved, but it’s a missed opportunity for public accountability.”
Kint further commented, “Facebook has successfully remade the ‘Cambridge Analytica’ scandal about a few bad actors rather than an unraveling of its entire business model of surveillance capitalism and the reciprocal, unbridled sharing of personal data,” Kint said. “That reckoning is now left unresolved.”
Broader Context of Privacy Scrutiny
Meta, formerly Facebook, has emphasized its significant investments in user privacy since 2019, reporting billions spent on protection measures. However, this lawsuit highlighted investor concerns over the board’s oversight of compliance with critical regulatory agreements.
The trial offered a rare chance for investors to see **Zuckerberg** questioned under oath. Notably, a similar opportunity in 2017, concerning a shareholder dispute over stock class issuance, also concluded with a settlement before his testimony.
In 2023, Meta agreed to pay $725 million to settle a nationwide class-action privacy lawsuit concerning the Cambridge Analytica scandal, a settlement that received preliminary court approval. (Reuters, 2023).
