Meta Platforms executives, including Mark Zuckerberg and several current and former directors, have agreed to settle a lawsuit that sought $8 billion in damages over alleged failures to protect Facebook users’ privacy.
The settlement was announced Thursday in Delaware’s Court of Chancery as the trial was set to begin its second day.
The case was based on claims that the executives allowed repeated violations of a 2012 agreement with the Federal Trade Commission, which led to a $5 billion fine against Facebook in 2019. Shareholders argued that Zuckerberg, Meta board member Marc Andreessen, former COO Sheryl Sandberg, and other former officials should be personally responsible for the company’s legal costs.
The lawsuit did not name Meta as a defendant. The company has stated on its website that it has spent billions of dollars since 2019 to improve user privacy.
Trial testimony was expected to include Zuckerberg, Sandberg, Andreessen, and former board members Peter Thiel and Reed Hastings. By settling, the defendants avoided being questioned under oath.
Sandberg had earlier been sanctioned for deleting emails during the case.
The settlement resolves what would have been the first trial involving Caremark claims, a type of oversight allegation considered difficult to prove under Delaware corporate law. Even if the shareholders had won, the case would likely have gone to appeal.
The lawsuit followed the Cambridge Analytica scandal, in which data from millions of users was improperly accessed by the political consulting firm. That incident played a key role in the FTC’s decision to impose the record fine on Facebook.
During the trial’s first day, an expert witness cited weaknesses in Facebook’s privacy policies but did not confirm a breach of the FTC agreement. Former board member Jeffrey Zients testified that the FTC fine was not meant to protect Zuckerberg from personal liability.
Notes from Zients presented by the defense showed efforts to improve user privacy.
This is the second time Zuckerberg has avoided testifying in the Delaware court. In 2017, he withdrew a plan to issue a new class of stock shortly before he was scheduled to testify in a related case.
