- Zuckerberg and Meta directors settle a massive $8 billion privacy lawsuit, avoiding intense courtroom scrutiny.
- Facebook's past catches up as shareholders push for personal accountability from executives over privacy breaches.
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Meta Platforms Inc META has reached a settlement with its shareholders and company leadership, thereby avoiding an $8 billion trial.
What Happened: This move spares CEO Mark Zuckerberg from testifying about alleged data violations.
The lawsuit was initiated by Meta shareholders against Zuckerberg and other former company officials, including ex-Chief Operating Officer Sheryl Sandberg.
The shareholders aimed to hold them accountable for billions of dollars in fines and legal costs the company has incurred in recent years.
Meta shareholders had alleged that current and former officers and directors of Facebook failed to safeguard users’ data, reports Reuters.
In 2019, the Federal Trade Commission imposed a $5 billion fine on Facebook for not adhering to a 2012 agreement to safeguard users’ data.
The shareholders demanded the 11 defendants to use their personal wealth to compensate the company. The defendants refuted the allegations, which they dubbed as “extreme claims”.
Also Read: Meta Secretly Keeps ‘Block’ Lists of Ex-Employee, Former Google HR Chief Calls It ‘Unheard Of’
The settlement enables the plaintiffs to sidestep a challenging case, while Zuckerberg and other defendants evade having to respond to intense questions under oath.
The case emerged following revelations that data from millions of Facebook users was accessed by Cambridge Analytica, a now-defunct political consulting firm that worked for Donald Trump’s successful U.S. presidential campaign in 2016.
The settlement not only saves Meta Platforms from a potential $8 billion payout but also prevents further damage to its reputation.
It also provides some relief to Delaware, which has been facing criticism for its perceived leniency towards shareholders suing directors.
The outcome of this case could potentially influence future decisions by companies considering Delaware as their legal domicile.
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