JAKARTA Meta Platforms CEO Mark Zuckerberg and other former company officials approved the settlement of an $8 billion lawsuit accusing them of harming the company by allowing repeated violations of the privacy of Facebook users. This was conveyed by the shareholder's attorney in a trial at the Delaware Chancery Court on Thursday, July 17.
Details of the settlement agreement were not disclosed to the public, and the defense attorney did not give a statement to judge Kathaleen McCormick. The trial, which was supposed to enter its second day, was later postponed by the judge, who also congratulated both sides on the agreement.
The plaintiff's attorney, Sam Closic, said the deal was reached quickly. One of the defendants in this case, billionaire and Meta director Marc Andreessen, was due to testify on Thursday.
The lawsuit was filed by Meta's shareholders against Zuckerberg, Andreessen, former Chief Operating Officer, Sheryl Sandberg, and a number of other former officials. They hope that the defendants are personally responsible for the billions of dollars in fines and legal costs that the company has paid in recent years.
In 2019, the United States Federal Trade Commission (FTC) imposed a $5 billion fine on Facebook after finding that the company failed to comply with a data protection deal made with the FTC in 2012.
Through this lawsuit, the shareholders requested that 11 defendants use their personal assets to compensate the company's losses. However, the defendants denied all allegations and called them "extreme claims."
Facebook changed its company name to Meta in 2021. The company itself is not a defendant in this case. Meta declined to provide official comments, while lawyers for the defendants have not yet responded to requests for comment from the media.
"Although this settlement may provide relief to the parties involved, this remains a missed opportunity for public accountability," said Jason Kint, head of Digital Content Next, a digital media industry association.
Zuckerberg is scheduled to testify on Monday and Sandberg on Wednesday, with the original trial schedule planned to take place until the weekend. The trial is also expected to present testimony from other former Facebook council members, such as Peter Thiel, co-founder of Palantir Technologies, and Reed Hastings, founder of Netflix.
In the lawsuit, Meta investors alleg that the current and previous board of directors failed to oversee the company's compliance with the 2012 FTC agreement. They also claim that Zuckerberg and Sandberg are consciously running Facebook as illegal data collection operations.
The case comes after the Cambridge Analytica scandal was uncovered, in which data on millions of Facebook users was accessed by the political consulting firm, which was later used to support Donald Trump's 2016 presidential campaign. This disclosure was the main trigger for major fines from the FTC at the time.
An expert witness from the plaintiff's side on Wednesday revealed "singles and weaknesses" in Facebook's privacy policy, although he did not directly state that the company violated an agreement with the 2012 FTC.
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Jeffrey Zients, a former Meta board member, testified that the company did not pay the FTC fine as an attempt to protect Zuckerberg from personal legal responsibility, as alleged by shareholders.
Meta on its official website states that since 2019 they have invested billions of dollars to increase user data protection.
This trial was initially predicted to be a rare opportunity for investors to see Zuckerberg testify under oath. Earlier, in 2017, Zuckerberg was also scheduled to attend a trial regarding his plan to issue special class shares to maintain his control of the company, but the case ended peacefully before he appeared in court.
"Facebook has succeeded in changing the Cambridge Analytica scandal as if it were only due to a handful of individuals, when in fact it was the disclosure of their overall business model based on surveillance capitalism and indefinite exchange of personal data," Jason Kint said. "Now, accountability for that has not been resolved again."
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