Meta Platforms CEO Mark Zuckerberg has agreed to an $80 million settlement with a class of shareholders. They were suing the company over its abuse of privacy violations on Facebook, and that multibillion-dollar lawsuit is now settled. Their public announcement on Thursday would come as the trial entered its second day in a Delaware court. Shareholders were seeking the maximum allowed $8 billion in damages because of the misconduct.
The original lawsuit, filed in 2018. It came on the heels of disclosures that Cambridge Analytica had misappropriated the data of tens of millions of Facebook users in order to boost President Donald Trump’s 2016 election bid. Shareholder actions had claimed that Zuckerberg and other executives had failed to take reasonable steps to ensure that the company’s privacy practices were managed properly.
Continuing in denial of the allegations, Meta has claimed to have poured billions of dollars into privacy reforms since 2019. Former Meta director, Jeffrey Zients, emphasized the exorbitant cost of the company’s legal violations. For one thing, he noted that much of the Federal Trade Commission’s HIT was a $5 billion fine. In his new statement, he explained that the settlement decision was not made to protect Zuckerberg from personally incurring any legal liability.
Chancellor Kathaleen McCormick presided over the case. She was supposed to hear testimony from different stakeholders each day of the week. Sheryl Sandberg, former chief operating officer for Meta, was scheduled to testify. She would be in good company among other high profile defendants such as Peter Thiel, co-founder of Palantir Technologies, and Reed Hastings, co-founder of Netflix.
The plaintiffs claimed that Zuckerberg and his fellow C-suite executives are liable to Meta for over $8 billion. This figure is based on fines and litigation costs incurred as a result of privacy breaches.
“One thing that could have come out of a full trial is a full accounting of how Facebook came to adopt and approve any illegal practices,” – Ann Lipton.
The lawsuit’s implications extend beyond financial penalties. It raises questions about accountability and transparency within Meta’s leadership. Ann Lipton, a legal scholar with a specialty in corporate governance, put the real emphasis on the need to dig into why these privacy violations occurred.
“It’s valuable for society to know how this happened and what went wrong that they were breaking the law, if they were breaking the law,” – Ann Lipton.
In connection with that settlement process, Meta has recently reincorporated in Texas after initially operating under the law of Delaware. The ongoing legal developments highlight the challenges facing major technology firms as they navigate regulatory scrutiny and public concern over data privacy practices.