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A Lingering Scandal for Meta
Nearly seven years after the Cambridge Analytica scandal erupted, Meta is still haunted by its past. Group shareholders, united in a class action, took legal action against the American justice system as early as 2018, accusing Mark Zuckerberg and his closest associates—including Sheryl Sandberg, the former deputy who left in 2022—of negligence in handling the crisis.
The Cambridge Analytica scandal, disclosed in 2018, involved the unauthorized harvesting of personal data from tens of millions of Facebook users by a British consulting firm, aimed at refining political targeting during the 2016 U.S. presidential election and the Brexit referendum. This incident led to a record $5 billion fine imposed on Facebook by the FTC (Federal Trade Commission), for violating an agreement made with authorities in 2012.
Shareholders Demanded Up to $8 Billion
The trial that opened on Wednesday in Wilmington centered on serious accusations directly targeting the company’s governance. Included among the defendants were Marc Andreessen, a notable figure in tech venture capital, entrepreneur Peter Thiel, and even Jeffrey Zients, currently Chief of Staff for Joe Biden.
The shareholders were seeking over $8 billion in damages, a figure calculated by considering the fines already paid by Facebook as well as legal expenses related to the scandal. The complaint also raised suspicions of insider trading, accusing some board members of selling shares while being aware of the looming crisis.
Meta, as a corporate entity, was not prosecuted as a legal person in this case. But the entire historical leadership of the group was indeed on trial.
A Quiet Settlement
After months of preparation, the case was set to be a highly publicized trial, especially since all the accused were expected to be publicly examined at the Delaware court. Jeffrey Zients was the only one who testified on Wednesday at the opening of the debates.
But behind the scenes, a settlement was reached the next day, allowing Mark Zuckerberg and the others involved to avoid public court appearances and put an end to the legal proceedings. The amount of this confidential settlement has not been disclosed. Instead of a historic trial, it was a brief hearing. A few hours and then it was over with what was likely a staggering settlement…