Zuckerberg, Meta Directors Settle $8 Billion Facebook Privacy Lawsuit

 

Mark Zuckerberg and a group of Meta Platforms’ current and former executives, including Sheryl Sandberg and Marc Andreessen, have agreed to settle a major shareholder lawsuit that accused them of enabling repeated violations of Facebook users’ privacy. The case, filed in Delaware's Court of Chancery, sought $8 billion in damages and was aimed at holding the individuals rather than the company personally liable.

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The shareholders alleged that Zuckerberg, Sandberg, Andreessen, and other board members failed in their oversight duties by allowing Facebook to repeatedly violate a 2012 Federal Trade Commission (FTC) consent agreement. That agreement had required Facebook to safeguard user data following earlier privacy breaches.

The claims stemmed from the Cambridge Analytica scandal, where data from millions of Facebook users was harvested without consent for political profiling. This led to a record $5 billion FTC fine in 2019. Shareholders said Meta (then Facebook) paid that fine and other legal costs due to the personal negligence of top executives. They argued that those individuals should reimburse the company from their own wealth.

The lawsuit described the company's leadership as knowingly running Facebook as an illegal data-harvesting business, prioritizing profit over user privacy. It also accused them of failing to address ongoing data protection flaws, citing internal weaknesses even highlighted by expert witnesses during the trial.

Notably, the company itself was not named as a defendant. Instead, the case targeted the people who were in charge. Before the trial was paused for settlement talks, big names like Peter Thiel and Reed Hastings were expected to testify, with Zuckerberg scheduled for Monday.

The trial in Delaware was unexpectedly paused on its second day after lawyers informed the judge that a settlement had been reached. Judge Kathaleen McCormick congratulated the parties and adjourned the court proceedings. No public details about the settlement have been disclosed.

Sam Closic, a lawyer for the plaintiffs, said the agreement came together very quickly. Defense lawyers, including those representing Zuckerberg and Meta directors, did not comment in court. The case had drawn attention due to the high-profile nature of the witnesses and the staggering $8 billion in damages being sought.

Among those named in the lawsuit were Meta CEO Mark Zuckerberg, former COO Sheryl Sandberg, and board members like billionaire venture capitalist Marc Andreessen. The plaintiffs had hoped to force these individuals to personally cover Meta's massive legal liabilities including the $5 billion FTC fine imposed in 2019 for breaching a 2012 agreement on user privacy.

Expert testimony during the trial described serious shortcomings in Facebook’s privacy systems. However, that witness stopped short of stating outright that the company violated the FTC settlement. Former board member Jeffrey Zients also denied claims that the FTC fine was meant to protect Zuckerberg from personal liability.

Facebook, which rebranded as Meta in 2021, maintains that it has invested billions of dollars since 2019 to protect user privacy. The company stated on its website that it continues to improve data protection policies and systems.

Although the company itself was not a defendant in the case, the lawsuit represents one of the most aggressive shareholder-led accountability efforts in recent corporate history. The sudden settlement, just days before key witnesses were to testify including Zuckerberg and Sandberg raises questions about what might have been revealed during cross-examinations.

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