Mark Zuckerberg and other Meta executives have put an end to the $8 billion Cambridge Analytica privacy lawsuit with a settlement.
Meta decided to avoid drawing the kind of attention that allowing the privacy scandal to go to trial would have had by settling with the suing shareholders.
Shareholders hit board members with $8B privacy lawsuit
Meta’s CEO Mark Zuckerberg and other top executives, including the company’s former COO, Sheryl Sandberg, have agreed to settle a major shareholder lawsuit over the company’s mishandling of user data during the Cambridge Analytica scandal.
The lawsuit, filed in Delaware Chancery Court, sought $8 billion in damages and accused the company leaders of intentionally failing to uphold privacy commitments mandated by federal regulators.
A lawyer representing one of the plaintiffs confirmed that a settlement had been reached “in principle” with Meta and its executives. With an agreement in place, the high-profile trial in Delaware, where Zuckerberg had been expected to testify, is now over.
The terms of the settlement were not disclosed during Thursday’s court proceedings, and attorneys for both sides have yet to provide public comments about it.
The lawsuit was based on allegations that Meta executives deliberately failed to comply with a 2012 consent decree issued by the Federal Trade Commission ( FTC ), which required the company to strengthen its privacy practices.
According to the shareholders, Meta’s failure to adhere to that order directly led to significant legal and financial consequences, including a $5.1 million payment to the FTC and damage to the company’s reputation, which then affected the company’s value.
Shareholders had asked the court to order Zuckerberg, Sandberg, and other executives to repay Meta for the losses they claim stemmed from this mismanagement. By reaching a settlement, Meta avoids paying more attention to its long-standing privacy issues.
Cambridge Analytica data privacy scandal
In 2018, there were revelations that the political consulting firm, Cambridge Analytica, harvested the personal data of millions of Facebook users without their consent. The firm then used that data to support Donald Trump’s 2016 presidential campaign.
Facebook experienced intense backlash, leading to Zuckerberg appearing multiple times before Congress and raising scrutiny and concern over Facebook’s data policies.
The FTC subsequently sued Meta, formerly known as Facebook Inc., accusing the company of ignoring “red flags” about how Cambridge Analytica obtained the data. Regulators argued that Meta failed to properly monitor how third-party developers accessed user information, which they said violated the 2012 consent decree.
Zuckerberg’s involvement in the decision-making process has been a central issue in the case. Plaintiffs alleged that he and other senior leaders knowingly allowed violations of the FTC’s consent order to continue, prioritizing user growth and engagement over proper safeguards.
The complaint argued that the failure to follow protocol exposed the company to unnecessary regulatory and financial risk and saddled the shareholders with the cost.
Meta did not admit wrongdoing in the FTC case, but it paid $5.1M to resolve the claims.
In the years since, Meta has made repeated promises to overhaul its privacy practices, including restructuring its approach to data collection and expanding its internal compliance teams. But for many investors, those measures have not gone far enough.
The shareholder suit in Delaware represents one of the most serious legal efforts to hold individual executives accountable for the fallout from Cambridge Analytica.
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