Meta Platforms CEO Mark Zuckerberg and other high-ranking current and former executives of the company are on trial as they face accusations from shareholders of failing to safeguard user data properly.
On July 16, a non-jury trial concerning Facebook and its privacy practices began before Chief Judge Kathaleen McCormick in Delaware’s Court of Chancery. The founder of the popular social media site and other executives face allegations that they did not properly safeguard Facebook user data, leading to a record fine of $5 billion levied by the Federal Trade Commission (FTC), and billions more in related costs.
The $8 billion shareholder derivative lawsuit seeks to hold Zuckerberg, former Facebook Chief Operating Officer Sheryl Sandberg, former Facebook Vice President Konstantinos Papamiltiadis, and other directors personally liable for what plaintiffs say are breaches of their fiduciary duties.
The defendants say those allegations as extreme and maintain that Facebook has invested billions of dollars to improve user privacy since 2019.
Zuckerberg and other major figures associated with Meta are expected to testify in the trial. Other potential witnesses include venture capitalist Marc Andreessen, Netflix co-founder Reed Hastings, former PayPal executive Peter Thiel, former White House chief of staff Jeffrey Zients, and others who served on Meta’s board during the relevant period.
Meta Platforms itself is not a defendant in the suit. It did not immediately respond to a request for comment from The Epoch Times.
The case centers on Facebook’s 2012 consent decree with the FTC, which required the company to protect user privacy and obtain explicit consent before sharing data beyond users’ privacy settings.
The 2012 FTC consent decree was triggered by earlier privacy concerns. It mandated that Facebook provide “clear and prominent notice” to users about data collection and obtain their “express consent” for data sharing beyond privacy settings.
The lawsuit contends that Facebook executives and board members intentionally failed to ensure compliance with the 2012 agreement. This, the plaintiffs contend, contributed to the Cambridge Analytica scandal.
The defendants argue that Zuckerberg and the board did take steps to comply with the FTC’s requirements and that Facebook was misled by Cambridge Analytica.
According to court filings, the defendants say Zuckerberg used a stock-trading plan designed to prevent insider trading and did not profit improperly.
The lawsuit alleges Facebook’s policies allowed third-party apps to collect not only user data but also data from users’ friends, which Cambridge Analytica exploited.
In that event, data from up to 87 million Facebook users was improperly accessed by political consulting firm Cambridge Analytica. The firm then used the data to build political profiles during the 2016 U.S. presidential campaign.
The fallout from the scandal was global and significant. The Federal Trade Commission’s record $5 billion fine against Facebook in 2019 was the largest ever imposed in a privacy enforcement action at that time. Investigations by lawmakers in the United Kingdom and elsewhere concluded that better compliance with the 2012 order could have prevented the breach.
