Facebook's founder, Mark Zuckerberg, and Meta Platforms' investors reach agreement, putting an end to the contentious $8 billion trial linked to Facebook's privacy violations lawsuit.
In a significant development, Mark Zuckerberg and other current and former executives of Meta Platforms have agreed to settle a long-standing lawsuit brought forth by shareholders. The lawsuit, initially filed in 2018 following the Cambridge Analytica scandal, accused Zuckerberg and other Meta leaders of neglecting to enforce a 2012 Federal Trade Commission (FTC) consent order designed to protect user data[1][2][3].
The settlement, announced on the second day of trial proceedings at the Delaware Court of Chancery, comes with an $8 billion price tag. Shareholders alleged negligence and failure to prevent or disclose Facebook’s violations of privacy rules, including the repeated ignoring of the 2012 FTC consent order requiring user consent for data collection and sharing[1][2][3].
The case stemmed from the misuse of millions of Facebook users’ data by Cambridge Analytica, a now-defunct political consulting firm, and linked to the 2016 U.S. presidential campaign. Facebook had already faced a $5.1 billion FTC fine and billions more in other legal settlements[1].
Meta as a company was not named as a defendant, and the settlement mainly involved personal financial responsibility from Zuckerberg and other executives for the alleged damages caused to the company. Neither Meta nor Zuckerberg publicly confirmed the details of the settlement beyond the court filings and shareholder lawyer statements[2][3].
The trial, which would have provided a rare opportunity for Meta investors to see Zuckerberg answer probing questions under oath, was scheduled to run through the end of next week. Notable figures such as Peter Thiel and Reed Hastings, former Facebook board members, and billionaire venture capitalist Marc Andreessen, a defendant in the trial and a Meta director, were expected to testify[1].
Jeffrey Zients, a former board member, testified that the company did not agree to the FTC fine to spare Zuckerberg legal liability[1]. An expert witness for the plaintiffs testified about "gaps and weaknesses" in Facebook’s privacy policies but did not say if the company violated the 2012 agreement with the FTC[1].
The settlement ends the shareholder lawsuit that claimed the leadership breached their duties by allowing years of unlawful data practices, thereby damaging the company financially and reputationally. The shareholders wanted the defendants to use their personal wealth to reimburse the company[1].
Jason Kint, the head of Digital Content Next, expressed disappointment that the settlement may lack public accountability[1]. The settlement details have not been disclosed, and it remains unclear what measures Meta will take to address the alleged privacy violations moving forward.
Facebook has stated that it has invested billions of dollars into protecting user privacy since 2019[1]. In 2021, the company changed its name to Meta, reflecting its focus on developing virtual reality and augmented reality technologies.
[1] The Verge [2] CNBC [3] Reuters
The settlement, totaling $8 billion, will see Mark Zuckerberg and other Meta executives pay for the damages caused to the company due to the breach of duties related to unlawful data practices, with the intention of reimbursing the company using their personal wealth. Despite the settlement's conclusion, the specific details have not been disclosed, leaving uncertainty about the future measures Meta will implement to remedy the alleged privacy violations, and the lack of public accountability remains a concern.
