Mark Zuckerberg is set to take the stand this week in a high-stakes $8 billion courtroom battle where he and other company executives are being accused of allowing Facebook to be run in a manner that violated users’ privacy on a massive scale.
The lawsuit, brought by investors in Meta Platforms, the parent entity of Facebook, WhatsApp, and Instagram alleges that Zuckerberg and several former and current top officials repeatedly breached a 2012 consent decree made with the Federal Trade Commission, which obligated the company to protect its users’ personal information.
The controversy stems from a 2018 revelation that Cambridge Analytica, a political data firm involved in Donald Trump’s 2016 presidential campaign, had improperly obtained data from millions of Facebook users.
In response, shareholders are seeking reimbursement from Zuckerberg and the other named executives for over $8 billion in damages, which includes a historic $5 billion regulatory fine levied in 2019 for breaching the FTC agreement.
Other individuals listed in the lawsuit include former COO Sheryl Sandberg, investor and board member Marc Andreessen, and former board members Peter Thiel and Reed Hastings.
Zuckerberg and his co-defendants, while not responding publicly, have called the accusations “extreme claims” in legal documents. Meta itself is not on trial and has declined to provide a statement.
The non-jury proceedings are taking place in Wilmington, Delaware, and are expected to run for eight days. The hearing will primarily delve into past decisions and corporate meetings from around a decade ago to examine how the 2012 deal with the FTC was executed.
Even though the issues at the heart of the trial are historical, the case unfolds amid persistent questions about Meta’s current privacy practices, particularly regarding how it trains its artificial intelligence systems. Since 2019, the company says it has poured billions into upgrading its privacy safeguards.
Jason Kint, who leads a digital media industry organization, said the trial could reveal key insights into what Meta’s leadership knew—and when—about the misuse of users’ data. “There’s an argument we can’t avoid Facebook and Instagram in our lives,” he said. “Can we trust Mark Zuckerberg?”
Allegations Of Massive Oversight Failure
Two years ago, the defendants attempted to have the case dismissed before reaching trial, but the court rejected that request. “This is a case involving alleged wrongdoing on a truly colossal scale,” stated then-presiding judge Travis Laster. The trial is now being led by Judge Kathaleen McCormick in the Court of Chancery.
To win, the investors which include union-backed pension funds such as California’s State Teachers’ Retirement System must meet the high bar of proving that Meta’s board failed entirely in its responsibility to oversee the company’s conduct. Legal analysts say this may be the first case of its kind to reach trial on these grounds.
The suit claims that Zuckerberg and Sandberg knowingly permitted conduct that violated legal boundaries. While Delaware corporate law shields executives from poor business choices, it does not extend that protection to illegal acts even if those acts result in financial gains.
The defense team argues that the plaintiffs lack the necessary evidence.
In filings submitted before the trial, shareholders assert that deceptive practices continued well after the 2012 FTC deal allegedly under Zuckerberg’s direction. Defendants counter that Facebook took steps to address compliance by assembling a privacy oversight team and hiring an external firm to monitor its practices, describing the company itself as a target of Cambridge Analytica’s “studied deceit.”
One additional claim brought by the plaintiffs centers on Zuckerberg’s financial activity. They allege that he sold large amounts of stock after learning the scandal was about to become public, earning an estimated $1 billion in profit. Defendants argue that the sales were pre-planned under a legal trading arrangement meant to avoid insider trading violations. They also say the proceeds were directed toward philanthropic efforts.
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