Meta Platforms, the parent company of Facebook, and current and former executives, including Chief Executive Officer Mark Zuckerberg, reached a sudden settlement with the plaintiffs in an $8 billion shareholder lawsuit ahead of their testimonies. This lawsuit centers on allegations that the executives evaded responsibility regarding a $5 billion fine imposed on Meta related to a personal data breach.
Reuters reported on the 17th (local time) citing documents submitted to the Delaware Court of Chancery in the United States. The plaintiffs informed Judge Katherine McCormick of the settlement ahead of the second hearing on the same day. The details of the settlement are confidential.
This lawsuit originated from the 'Cambridge Analytica scandal,' in which the personal data of over 87 million Facebook users was collected without consent and used for election advertising during the 2016 U.S. presidential election. Following the initial report, Facebook's stock price fell by about 7% within a day, and in 2019, the Federal Trade Commission (FTC) imposed a $5 billion fine on Meta. However, no separate accountability for the then-executives was pursued.
In response, 11 Meta shareholders filed a lawsuit claiming that the company bore excessive fines and legal expenses, asserting that this was a measure taken by executives, including Zuckerberg, to evade personal responsibility.
This settlement came just as Mark Andreessen, a Meta director who was scheduled to testify alongside Mark Zuckerberg, was about to appear in court. Additionally, testimonies from Peter Thiel, co-founder of Palantir, and Reed Hastings, co-founder of Netflix, were also scheduled.
Jason Kint, head of the digital content industry group Digital Content Next, pointed out regarding this settlement that it represented a missed critical opportunity to hold accountability, saying, "Facebook has succeeded in minimizing the situation as the actions of a few individuals. The core structures of surveillance capitalism and unlimited personal data usage were not touched."