Zuckerberg Reaches Settlement in Shareholder Lawsuit Over Facebook Privacy Scandals
Mark Zuckerberg has agreed to settle a major lawsuit brought by shareholders who accused Meta’s top executives and board members of mishandling repeated privacy breaches, including the high-profile Cambridge Analytica scandal.
The lawsuit, which sought \$8 billion in damages, was resolved just as the trial was entering its second day in Delaware’s Chancery Court. The terms of the settlement—including the final amount—have not been publicly disclosed. Meta declined to comment on the resolution.
The shareholders alleged that Zuckerberg and other company leaders failed to prevent and adequately respond to Facebook’s misuse of user data. Central to their claims was the 2018 revelation that political consulting firm Cambridge Analytica accessed personal information from millions of Facebook users without consent. The firm had ties to former President Donald Trump’s 2016 campaign.
Plaintiffs asked the court to hold 11 current and former executives and directors financially responsible, demanding that they reimburse Meta more than \$8 billion in legal fees and fines paid out over privacy violations. They also raised concerns about the timing of stock sales by some executives.
Among those named in the suit were Jeffrey Zients—former Meta board member and current White House Chief of Staff under President Joe Biden—along with Peter Thiel, co-founder of Palantir Technologies, and Reed Hastings, co-founder of Netflix. Former Meta COO Sheryl Sandberg was also scheduled to testify.
In testimony prior to the settlement, Zients acknowledged the significance of the \$5 billion fine imposed by the Federal Trade Commission, but claimed it was not paid to shield Zuckerberg personally. All defendants waived their right to testify further under the terms of the settlement.
Critics of the agreement expressed concern that the public may now be denied a full understanding of how and why Facebook allowed extensive data misuse to occur. “If there had been a full trial, we would have had the opportunity to learn how and why Facebook engaged in illegal behavior,” one shareholder noted. “That would have been valuable information for society. Now that accountability would be gone.”
Meta—formerly Facebook and owner of Instagram and WhatsApp—was not a direct party to the lawsuit. However, the company has said it has invested billions of dollars into privacy improvements since 2019.
Chancellor Kathleen McCormick was expected to hear further testimony and rule on the case next week. McCormick made headlines last year when she struck down Elon Musk’s \$56 billion Tesla pay package, prompting Tesla to relocate its corporate registration from Delaware to Texas.
