JAKARTA - A trial worth $8 billion filed by Meta Platforms shareholders against Mark Zuckerberg and a number of current company leaders and former leaders began on Wednesday 16 July. The lawsuit accuses them of illegally collecting Facebook user data, violating a 2012 agreement with the United States Federal Trade Commission (FTC).
Jeffrey Zients, former White House Chief of Staff in the era of President Joe Biden and director of Meta for two years since May 2018, is expected to be one of the first witnesses to testify in this juryless trial. The trial was chaired by Chief Judge Kathaleen McCormick at the Delaware Chancery Court.
The case will present testimony from Zuckerberg and other billionaire defendants, including former Chief Operating Officer, Sheryl Sandberg, venture capitalist and board member Marc Andreessen, as well as former board members Peter Thiel, founder of Palantir Technologies, and Reed Hastings, founder of Netflix.
Lawyers for the defendants, who denied the allegations, declined to comment.
The case began in 2018 after it was revealed that data on millions of Facebook users was accessed by Cambridge Analytica, a political consulting firm that has now disbanded and is working for Donald Trump's successful campaign in the 2016 US presidential election. The FTC then fined Facebook $ 5 billion (IDR 8.3 trillion) in connection with the scandal, arguing the company violated the 2012 agreement to protect user data.
Shareholders demanded that the defendants replace the FTC fine and other legal costs, which are estimated to total more than $8 billion. In court documents, the defendants called these allegations "exceeding" and claimed that evidence at trial would indicate that Facebook had hired an external consulting firm to ensure compliance with the FTC agreement. They also stated that Facebook was a victim of Cambridge Analytica fraud.
Meta, who is not a defendant in this case, declined to comment. On its website, the company says it has invested billions of dollars to protect user privacy since 2019.
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The lawsuit is seen as the first case to reach trial on charges that board members deliberately failed to keep an eye on their company, a claim deemed the most difficult to prove in Delaware's corporate law.
In comparison, in 2021, Boeing's board of directors, both active and former, settled similar cases with allegations of surveillance violations of US$237.5 million, which is the biggest settlement for such cases. Boeing's directors admit no wrongdoing.
In addition to allegations related to privacy, the plaintiff also accused Zuckerberg of anticipating the Cambridge Analytica scandal that it would lower the company's share price and sell its Facebook shares, pocketing at least $1 billion.
The defendants denied that Zuckerberg did not trade based on insider information and used a stock trading plan that lost control of the sale, designed to prevent insider trading.
Judge McCormick is expected to decide on responsibility and compensation a few months after the trial is over.
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