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Mark Zuckerberg has reached an agreement to settle a multibillion-dollar lawsuit with shareholders concerning the handling of repeated privacy breaches by Facebook, now Meta, by its top executives and directors.
Shareholders had sought $8 billion in damages, though the final settlement amount remains undisclosed.
A lawyer for the shareholders announced the settlement on Thursday, just prior to the trial’s second day in a Delaware court. Meta has declined to comment.
The Meta shareholders alleged that Zuckerberg’s actions contributed to the Cambridge Analytica scandal, in which the data of millions of Facebook users was compromised and utilized by a political consulting firm.
Shareholders had requested the judge to mandate the 11 defendants named in the case to reimburse Meta for over $8 billion in fines and legal expenses, incurred to resolve user privacy breach claims.
The lawsuit also scrutinized the timing of stock sales by high-ranking officials within the company.
Meta, formerly known as Facebook, is the parent organization of the social media platform, along with Instagram and WhatsApp.
The shareholder lawsuit originated in 2018, following revelations that Cambridge Analytica, a political consulting firm involved in President Donald Trump’s 2016 campaign, accessed data from millions of Facebook users.
Jeffrey Zients, a Meta director for two years starting in May 2018 and former White House chief of staff under President Joe Biden, was among the defendants.
During Wednesday’s testimony, Zients acknowledged the significance of a $5 billion Federal Trade Commission fine, but denied it was intended to shield Zuckerberg from legal liability.
Other defendants included Peter Thiel, co-founder of Palantir Technologies, and Reed Hastings, co-founder of Netflix.
The settlement prevents the defendants from having to testify under oath.
Former chief operating officer Sheryl Sandberg was also expected to testify.
“One thing that could have come out of a full trial is a full accounting of how Facebook came to adopt and approve any illegal practices,” said Ann Lipton, a law professor at the University of Colorado.
“It’s valuable for society to know how this happened and what went wrong that they were breaking the law, if they were breaking the law,” Lipton added. “That kind of exposure serves a valuable social purpose. We won’t get that accounting now.”
Meta was not a direct party to the lawsuit but has stated its commitment to privacy reforms, investing billions of dollars since 2019.
Prior to the settlement, Delaware Judge Kathaleen McCormick was scheduled to hear testimony through next week before rendering a decision.
Last year, McCormick drew criticism from Tesla CEO Elon Musk after rejecting his $56 billion pay package.
The electric vehicle manufacturer has since relocated from Delaware and reincorporated in Texas.
The founder of the social media giant said one of the sites would cover an area nearly the size of Manhattan.
It was “horrible”, “stressful” and “isolating” those affected tell BBC News.
After Meta said some Facebook Groups were wrongly suspended, users tell the BBC the impact it is having – and say it’s a wider problem.
Group administrators have reported receiving automated messages which incorrectly say they have violated the rules.
Sam Altman said so far none of his “best people” had jumped ship to his big tech rival.
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