A settlement was reached in a class action lawsuit brought by investors against Meta CEO Mark Zuckerberg and other company leaders over claims related to the privacy scandal involving Cambridge Analytica.
The lawsuit alleged that Meta failed to fully disclose the risks to Facebook users regarding their personal information being misused by Cambridge Analytica, a firm supporting Donald Trump’s presidential campaign in 2016.
The big picture: Shareholders accused Facebook officials of repeatedly violating a 2012 consent order with the Federal Trade Commission by sharing personal data without users’ consent and selling user data to commercial partners in direct breach of the order.
- Facebook had previously agreed to pay a $5.1 billion penalty to settle FTC charges and faced fines in Europe, including a $725 million privacy settlement with users.
- Shareholders sought reimbursement of an estimated $8 billion or more from Zuckerberg and company leaders for the fines and legal costs incurred by Meta.
Go deeper: Former COO Sheryl Sandberg faced sanctions for deleting emails related to the Cambridge Analytica investigation, while other board members, including Marc Andreessen and Peter Thiel, were also defendants in the lawsuit.
- Jeffrey Zients, a former outside director, avoided sanctions as his role made it less likely for him to have access to relevant information; he supported the FTC settlement that the shareholders sought reimbursement for.
- The settlement was announced in court during what would have been the second day of trial, but no details of the settlement were shared at that time, and the attorneys and Meta’s communications representative declined to provide comments.
- Testimony was expected from Zuckerberg, Sandberg, and other board members during the trial, shedding light on the events and decisions surrounding the Cambridge Analytica scandal.
