Meta Platforms, formerly Facebook, has reached a significant settlement with investors who sued Mark Zuckerberg, venture capitalist Marc Andreessen, and other former and current company leaders. The lawsuit, which sought $8 billion in damages, alleged repeated failures to protect Facebook users’ privacy. The trial was halted on its second day as the settlement was confirmed in Delaware’s Court of Chancery.
Key Details of the Meta Privacy Lawsuit Settlement
- Settlement Parties: Mark Zuckerberg, Meta’s directors and officers, and Meta investors
- Allegations: Negligence in overseeing Facebook’s compliance with privacy rules, leading to multi-billion-dollar fines
- Court: Delaware Court of Chancery, Judge Kathaleen McCormick
- Settlement Terms: Confidential; financial and procedural details undisclosed
Why Investors Sued Zuckerberg and Meta Executives
Shareholders claimed that Zuckerberg, Andreessen, former COO Sheryl Sandberg, and others failed to prevent repeated privacy breaches, including:
- The 2019 $5 billion fine from the U.S. Federal Trade Commission (FTC)
- Facebook’s non-compliance with its 2012 FTC privacy agreement
- The Cambridge Analytica scandal, involving the misuse of Facebook user data during the 2016 U.S. presidential campaign
Investors sought to recover the company’s legal costs and fines from the defendants’ wealth, arguing Zuckerberg and others knowingly ran Facebook as an illegal data-harvesting operation.
Trial Halted as Meta Settlement Reached
The trial, scheduled to run through next week, was adjourned after just two days. Plaintiffs’ lawyer Sam Closic confirmed that settlement discussions progressed rapidly.
Billionaire venture capitalist Marc Andreessen was scheduled to testify on the second day. Other expected witnesses included:
- Mark Zuckerberg (scheduled for Monday)
- Sheryl Sandberg (scheduled for Wednesday)
- Peter Thiel, co-founder of Palantir Technologies
- Reed Hastings, co-founder of Netflix
- Jeffrey Zients, former Facebook board member
Reactions and Commentary
- Meta’s Position: The company declined to comment. Meta was not a direct defendant in the case.
- Defence Lawyers: No immediate public response.
- Industry Response:
Jason Kint, CEO of Digital Content Next, stated:“This settlement may bring relief to the parties involved, but it’s a missed opportunity for public accountability.”
Background: Facebook’s Privacy Issues
The lawsuit followed a series of high-profile privacy violations, including:
- The 2012 FTC agreement mandating stricter user data protections
- The record $5 billion FTC fine in 2019
- The Cambridge Analytica revelations affecting millions of users
During trial testimony, an expert witness for plaintiffs cited “gaps and weaknesses” in Facebook’s privacy policies but did not definitively say whether the company violated its FTC agreement.
Conclusion
While the exact terms of the settlement remain confidential, Meta’s resolution of this $8 billion lawsuit marks the latest chapter in its long-running privacy challenges. Shareholders may find closure, but as industry experts suggest, questions about accountability and oversight persist.
