Meta Platforms Inc. Chief Executive Mark Zuckerberg, along with former and current company directors and officers, today reached a settlement in a trial in which shareholders sought $8 billion in damages for losses related to the Cambridge Analytica privacy scandal.
The trial was only on its second day at Delaware’s Court of Chancery, with Zuckerberg and former Chief Operating Officer Sheryl Sandberg expected to take the stand next week. Marc Andreessen, the billionaire venture capitalist and Meta director, was expected to testify today, as was former board member Peter Thiel at some point.
Judge Kathaleen McCormick adjourned the trial on the second day before proceedings started. All the attorneys left the court without issuing comments on the proceedings. Meta hasn’t made a public statement, although it’s almost certain that the settlement was significantly less than the $8 billion the plaintiffs were asking for.
In 2018, Meta, then Facebook, was rocked when it became known that the British consulting firm Cambridge Analytica had been collecting user data for political advertising without users’ consent. The firm, which had worked on major political campaigns in the U.S., had spent years harvesting data.. The actions resulted in large fines in the U.K. and multiple lawsuits inside the U.S., plus a $5 billion fine from the U.S. Federal Trade Commission, considerably diminishing the returns of shareholders.
Company shareholders alleged that they had not been made aware of the risks. In the lawsuit, they asked that the 11 defendants reimburse their losses out of their own pocket – collectively, extremely deep pockets. The plaintiffs said the defendants deliberately ran the company in breach of FTC rules, essentially operating an illegal enterprise. The defendants called the allegations “extreme” before agreeing to a settlement.
Meta might soon be shelling out more cash, since the FTC is going after the company again in a landmark antitrust lawsuit that could cost Meta many billions. The commission is alleging that the acquisitions of WhatsApp and Instagram amount to the building of a monopoly.
Photo: Flickr
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