Meta investors, Zuckerberg reach settlement to end $8 billion trial over Facebook privacy violations
The parties did not disclose details of the settlement and defense lawyers did not address the judge, Kathaleen McCormick of the Delaware Court of Chancery. McCormick adjourned the trial just as it was to enter its second day and she congratulated the parties.
The plaintiffs' lawyer, Sam Closic, said the agreement just came together quickly.
Billionaire venture capitalist Marc Andreessen, a defendant in the trial and a Meta director, was scheduled to testify on Thursday.
Shareholders of Meta sued Zuckerberg, Andreessen and other former company officials including former Chief Operating Officer Sheryl Sandberg in hopes of holding them liable for billions of dollars in fines and legal costs the company paid in recent years.
The Federal Trade Commission fined Facebook $5 billion in 2019 after finding that it failed to comply with a 2012 agreement with the regulator to protect users' data.
The shareholders wanted the 11 defendants to use their personal wealth to reimburse the company. The defendants denied the allegations, which they called 'extreme claims.'
Facebook changed its name to Meta in 2021. The company was not a defendant and declined to comment.
On its website, the company has said it has invested billions of dollars into protecting user privacy since 2019. A lawyer for the defendants declined to comment.
'This settlement may bring relief to the parties involved, but it's a missed opportunity for public accountability,' said Jason Kint, the head of Digital Content Next, a trade group for content providers.
Zuckerberg was expected to take the stand on Monday and Sandberg on Wednesday. The trial was scheduled to run through the end of next week.
The case was also expected to include testimony from former Facebook board members Peter Thiel, Palantir Technologies co-founder, and Reed Hastings, co-founder of Netflix.
By settling, Zuckerberg and other defendants avoid having to answer probing questions under oath. Sandberg was found during the litigation to have deleted what were likely her most sensitive emails and she was sanctioned, making it harder for her to tell her side of the story in court.
The settlement allows plaintiffs to avoid trying a very difficult case. Meta investors alleged that former and current board members completely failed to oversee the company's compliance with the 2012 FTC agreement. The lawsuit also claimed that Zuckerberg and Sandberg knowingly ran Facebook as an illegal data harvesting operation.
The oversight allegations are known as Caremark claims, considered the most difficult to prove under Delaware corporate law. It was the first time Caremark claims went to trial, and even if the plaintiffs had gotten a judgment in their favor, the case would have been appealed to the Delaware Supreme Court. That court has reversed major shareholder victories in recent years.
The case followed revelations that data from millions of Facebook users was accessed by Cambridge Analytica, a now-defunct political consulting firm that worked for Donald Trump's successful U.S. presidential campaign in 2016. Those revelations led to the FTC fine, which was a record at the time.
On Wednesday, an expert witness for the plaintiffs testified about what he called 'gaps and weaknesses' in Facebook's privacy policies but would not say if the company violated the 2012 agreement that Facebook reached with the FTC.
Jeffrey Zients, a former board member, testified on Wednesday that the company did not agree to the FTC fine to spare Zuckerberg legal liability, as shareholders alleged.
The defendants' legal team also showed the court notes that Zients had taken when he was on the board that seemed to show he was urging the board to make user privacy a top priority, which would undercut plaintiffs' claims.
The trial settlement marks the second time Zuckerberg avoided testifying in the court. In 2017, Facebook abandoned a plan to issue a new class of stock as a way for Zuckerberg to extend his control over the company while selling his shares. The decision came a week before Zuckerberg was expected to testify in the Court of Chancery to defend the stock plan.
'Facebook has successfully remade the 'Cambridge Analytica' scandal about a few bad actors rather than an unraveling of its entire business model of surveillance capitalism and the reciprocal, unbridled sharing of personal data,' Kint said. 'That reckoning is now left unresolved.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
an hour ago
- Mint
Wall Street Week Ahead: Spotlight on Fed rate decision, earnings from Microsoft, Meta Platforms, Apple, Amazon
Wall Street in the week ahead will receive plenty of economic data, Big Tech earnings, and the US Federal Reserve's fifth interest rate decision of the year. The economic calendar will see the release of data such as jobs report, second quarter GDP (Gross Domestic Product) numbers, personal income and spending data, PCE (Personal Consumption Expenditures) Index, and S&P manufacturing PMI report among others. For the Q2 earnings, investors will closely watch financial results from tech giants Microsoft, Meta Platforms, Apple, and e-commerce giant Amazon. On the monetary policy front, market participants were keenly awaiting the interest rate decision from the Federal Reserve, which is widely expected to hold it steady. Post-rate decision, Jerome Powell's press conference will be heavily scrutinized amid enormous criticism from US President Donald Trump. On Friday, Trump said that he believed that Fed Chair Jerome Powellmight be ready to lower rates. He made a rare visit to the central bank on Thursday after calling Powell a "numbskull" earlier in the week for failing to cut rates. On July 29 (Tuesday), separate reports on advanced US trade balance in goods for June, S&P Case-Shiller Home Price Index (20 cities) for May, consumer confidence for July, job openings for June will be released. On July 30 (Wednesday), separate reports on ADP employment for July, GDP Q2, pending home sales for June, FOMC interest rate decision will be declared. Fed Chair Jerome Powell's press conference is also scheduled on Wednesday. On July 31 (Thursday), separate reports on Employment Cost Index Q2, personal income and spending for June, PCE Index for June, and Chicago Business Barometer (PMI) for July will be released. On August 1 (Friday), US employment report for July, S&P final US manufacturing PMI for July, ISM manufacturing for July, construction spending for June, consumer sentiment (final) for July, and TBA Auto sales for July will be released. Following companies are due to report second quarter results in the week ahead — Waste Management, Nucor, Visa, Procter & Gamble, UnitedHealth, Boeing, PayPal, Microsoft, Meta Platforms, Qualcomm, Robinhood, eBay, Apple, Mastercard, Exxon Mobil, and Chevron. data-vars-page-type="story" data-vars-link-type="Manual">US stocks ended higher and dollar firmed on Friday ahead of a big week for market risk. The S&P 500 gained 26.73 points, or 0.42%, to end at 6,390.08 points, while the Nasdaq Composite gained 53.95 points, or 0.26%, to 21,111.90. The Dow Jones Industrial Average rose 213.74 points, or 0.48%, to 44,907.65. In the bond market, the yield on the 10-year Treasury eased to 4.38% from 4.43%. The 2-year Treasury yield held steady at 3.91%.
Mint
3 hours ago
- Mint
Who is Derrick Perry? The shopper who averted major tragedy as 11 people stabbed at Walmart in Michigan
What began as a regular Saturday afternoon at a Walmart in Traverse City, Michigan, quickly descended into chaos as a 42-year-old man began stabbing customers at random. According to the Grand Traverse County Sheriff's Office, the attacker entered the store around 5 pm. wielding a folding knife, ultimately injuring 11 people — six critically and five seriously. But amid the panic, one man's courageous actions helped prevent further bloodshed. Derrick Perry, a local resident shopping with his family at the Walmart store, is being credited with stopping the attacker before more lives were lost. Eyewitnesses say Perry ran toward the suspect while others fled. 'He didn't even hesitate,' said one shopper who witnessed the incident. 'Everyone was running away, but Derrick ran toward the danger.' Security footage reportedly shows Perry using a store shelf for cover before lunging at the attacker, tackling him to the ground, and restraining him until law enforcement arrived. 'He was just a shopper like the rest of us, but he acted like someone who had trained for this,' said another witness. 'He was calm, precise, and brave.' Sources later confirmed that Perry has a background in security training, which may explain his composed and effective intervention. Traverse City Police Chief Lauren Gilbert praised Perry's selfless actions, saying, 'Had he not stepped in when he did, the situation could've turned much worse. He likely saved lives.' Sheriff Michael Shea added that the attacker appeared to act alone and that the victims were chosen at random. City officials are reportedly preparing to honor Derrick Perry with a Community Hero Award in the coming days. On social media, he is being hailed as a real-life hero. 'He didn't come in wearing a cape,' a local resident posted on Facebook. 'But he showed the kind of courage you only see in movies.' Munson Healthcare confirmed that all 11 victims are being treated at the region's largest hospital. As of Sunday morning, four were in serious condition, and seven were in fair condition. 'Encouraging signs of recovery' have been observed, hospital spokesperson Megan Brown said. Authorities say the attacker used a folding knife and that there is currently no known motive. Governor Gretchen Whitmer called the incident a 'brutal act of violence,' adding, 'Our thoughts are with the victims and the community reeling from this.' The FBI has also offered assistance in the investigation. Steven Carter, a Walmart delivery driver, saw part of the attack unfold in the parking lot. 'I saw him cut a woman's throat,' he said. 'Later, a group of shoppers surrounded him. They kept yelling 'Drop the knife,' but he said, 'I don't care, I don't care.' He kept backing away before someone tackled and subdued him.' That someone, it turns out, was Derrick Perry.
&w=3840&q=100)
Business Standard
5 hours ago
- Business Standard
CloudSEK detects Maha-based counterfeit currency syndicates on social media
Cyber intelligence firm CloudSEK has detected counterfeit currency syndicates based out of Maharashtra operating via social media platforms, the company said in a report. The report said that the earlier such syndicates were confined to the dark web and underground print shops and claimed that such syndicates were now operating in broad daylight through social media platforms like Facebook and Instagram. Sourajeet Majumder, a security researcher at CloudSEK, said the firm has reported about the syndicate to the law enforcement agencies with details of the cyber criminals along with their phone numbers, GPS location and supporting digital evidence. He said the counterfeit currency network was flourishing openly on social media platforms. "In a first-of-its-kind investigation, CloudSEK's STRIKE team has not only quantified the spread -- Rs 17.5 crore worth of fake Indian currency in just six months -- but also attributed key individuals behind the operation using facial recognition, GPS data, and digital forensics," the report said. CloudSEK is one of the cyber intelligence service providers to India cyber security watchdog CERT-In. The CloudSEK researchers found over 4,500 posts promoting counterfeit currency, more than 750 accounts and pages facilitating the sale and around 410 unique phone numbers linked to sellers. "Adhering to its commitment to responsible disclosure and aiding national security, the comprehensive findings from this investigation, including the detailed attribution of threat actors, their phone numbers, precise GPS locations, and supporting digital evidence, have been formally furnished to relevant central and state law enforcement agencies," Majumder said. He said that the critical intelligence has also been shared with appropriate regulatory authorities to enable swift and decisive action against this illicit network, safeguarding both the nation's financial stability and its citizens.
