Meta Settles $8 billion shareholders' privacy violation lawsuit
Meta Investors Sue Mark & Other Meta Leaders
Meta Investors Sue Mark & Other Meta Leaders
The famous Cambridge Analytica scandal, which exposed unlawful privacy practices involving Facebook, was followed by an $ 8 billion class action lawsuit by Facebook investors against Mark Zuckerberg and other Meta (then Facebook) board members as far back as 2018.
Facts of the Case
The plaintiffs in that case, led by Amalgamated Bank Inc. and some concerned shareholders, brought a shareholder action against board members at Facebook in a court in Wilmington, Delaware. The lawsuit claimed that the data harvesting of Facebook users following the Cambridge Analytica reports was a gross violation of an earlier 2012 agreement with the Federal Trade Commission (FTC). Meta battled the case up to the Supreme Court, where a full court of nine Justices heard arguments before unanimously allowing the case to go to trial in November of 2024.
Facebook’s Legal Battles following the Scandal
In the wake of the Cambridge Analytica scandal in 2019, the FTC fined Facebook $5 billion following the privacy violations and even instituted new oversight and restrictions on its business as part of a consent order. That same year, Facebook reached a $100 million settlement with the SEC for making misleading disclosures regarding the risk of misuse of Facebook user data. According to the SEC, for more than two years, “Facebook’s public disclosures presented the risk of misuse of user data as merely hypothetical when Facebook knew that a third-party developer had actually misused Facebook user data.”, and in 2022, it also settled a class-action for $725 million filed in California arising from the Cambridge Analytica reports.
The Settlement
Now, following the Supreme Court's decision to allow the lawsuit to go to trial, the proceeding was scheduled to see testimony from Zuckerberg and former Meta Chief Operating Officer Sheryl Sandberg. The roster of potential witnesses also included current and former board members, such as Peter Thiel of Palantir Technologies, billionaire venture capitalist Marc Andreessen, and Reed Hastings, co-founder of Netflix. Juicy right? This would have been one for the books.
It is essential to note that the lawsuit did not name Meta as a defendant; rather, it was filed against Zuckerberg, as well as current and former board members, personally. Part of the claims in the suit laboriously emphasized the violation of the FTC order, which would introduce allegations of fraud and malpractice on the part of Mark as CEO of Meta. For Meta and the board members, part of the challenge of taking this case to trial was the implications it would have on Mark’s ability to remain as CEO.
On the first day of the trial, which started on the morning of July 16, 2025, former President Joe Biden’s chief of staff, Jeffrey Zients, who was formerly on Facebook’s board of directors, gave his testimony that essentially emphasized the Meta’s commitment to protect Mark Zuckerberg from any personal liability relating to the FTC agreement. Zients told the court that it was important for the company to keep Mark as its CEO, as he was a “driving force” for the company.
Privacy law expert Neil Richards and Harvard computer scientist James Mickens also testified, with Richards telling the court that Facebook’s data sharing settings were misleading, while Mickens disclosed that Facebook’s website’s infrastructure allowed users' data to be widely shared with third parties.
On day 2 of the trial, testimony was set to commence on the morning of July 17, when a lawyer representing Meta shareholders informed the presiding judge that the parties in the case had reached a settlement. And just like that, the presiding judge congratulated the parties, bringing an end to almost an eight-year dispute and what would have been an eight-day-long trial. The details of the settlement were not disclosed in court, but it will likely be included in court filings.
We will continue to follow Meta’s technology policy and lawsuits closely, as they recently expressed dissatisfaction with the EU AI Act and may be preparing to launch a new series of AI litigation in the EU soon.
If you found this informative, you can subscribe for more stories like this.
Source: Reuters