Meta Executives Settle Big-Time Over Privacy Scandal

Meta Platforms CEO Mark Zuckerberg, along with current and former executives, has reached a major legal settlement with shareholders who accused them of causing billions in damage to the company by allowing repeated privacy violations on Facebook.

Sources familiar with the case say the agreement, reportedly valued at $8 billion, was reached Thursday, halting what was set to be a high-stakes trial in Delaware’s Court of Chancery.

Details of the settlement were not made public, and neither Meta nor the legal teams for the defendants offered immediate comment.

The case, presided over by Judge Kathaleen McCormick, was abruptly paused just as it was entering its second day.

“This came together quickly,” said plaintiffs’ attorney Sam Closic, signaling a sudden end to what could have been a landmark case in corporate accountability.

Shareholders brought the lawsuit against Zuckerberg and ten other Meta executives and board members, including billionaire investor Marc Andreessen and former COO Sheryl Sandberg.

Mark Zuckerberg

The suit aimed to hold them personally responsible for the massive legal and regulatory costs Meta has faced in recent years.

Most notable among them is a $5 billion fine imposed by the U.S. Federal Trade Commission (FTC) in 2019 for Facebook’s failure to uphold a 2012 data privacy agreement.

Plaintiffs argued that Zuckerberg and his team failed to ensure compliance with that agreement and instead presided over what they described as an illegal operation centered on mass data collection.

They were seeking reimbursement from the executives’ personal assets to cover the company’s losses.

The defendants denied all wrongdoing, calling the allegations “extreme claims.”

Meta itself was not named as a defendant in the case and has not commented on the settlement.

On its corporate site, the company maintains that it has spent billions since 2019 to strengthen its privacy protections.

The timing of the settlement short-circuited what would have been a rare courtroom appearance by Zuckerberg, who was scheduled to testify Monday.

Sandberg, who played a central role in Facebook’s growth during its most aggressive expansion years, was expected to take the stand later next week.

Other high-profile figures like Peter Thiel and Netflix co-founder Reed Hastings, both former Meta board members, were also slated to appear.

Billionaire venture capitalist Marc Andreessen, a current Meta director, was supposed to testify Thursday, just hours before the trial was called off.

The shareholder lawsuit stems from long-standing frustrations over the company’s failure to safeguard user data.

One of the key catalysts was the 2018 revelation that political consulting firm Cambridge Analytica accessed the personal data of millions of Facebook users without consent.

The scandal severely damaged Facebook’s reputation and triggered government investigations worldwide, culminating in the FTC’s record-setting fine.

This latest legal action offered investors a rare avenue to confront the company’s leadership directly.

According to the lawsuit, Meta executives not only failed to prevent the misuse of data but also maintained practices that prioritized growth and engagement at the expense of user privacy.

During testimony on Wednesday, an expert witness criticized what he described as “serious weaknesses” in Facebook’s data protection measures.

The witness however stopped short of asserting that the company had violated the 2012 FTC order outright.

Meanwhile, former Meta board member Jeffrey Zients disputed the claim that the company agreed to the FTC’s $5 billion fine to shield Zuckerberg from personal liability.

Though the settlement ends the current legal dispute, critics say it falls short of delivering meaningful accountability.

Jason Kint, CEO of Digital Content Next, said the case could have offered public insight into the inner workings of what he called Facebook’s “surveillance capitalism.”

“Instead, this settlement lets the broader reckoning over Facebook’s business model slip away once again,” Kint said.

“The narrative has been spun into a story about individual bad actors instead of structural failures.”

Meta’s stock fell slightly following the announcement.

It was down 0.4% by midday in New York and over 3% for the week.

This reflected investor uncertainty amid renewed scrutiny of the company’s practices.

While the financial terms offer closure for shareholders, the larger question of how social media giants handle user data remains unresolved.

For now, the prospect of Zuckerberg facing tough questioning under oath has been deferred once more.

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