Zuckerberg Faces Meta Investors in the $8 Billion Cambridge Analytica Trial

Meta Platforms CEO Mark Zuckerberg is set to testify in the Cambridge Analytica, $8 billion trial that begins in Delaware this week. According to Reuters, Zuckerberg has been sued for running Facebook in a way that allowed for the harvesting of user data without consent. 

Meta investors sued Zuckerberg along with current and former employees for violating a 2012 agreement between the Federal Trade Commission (FTC) and Facebook to keep user data safe. 

Scope of the Case 

The non-jury trial will last for eight days. The Zuckerberg privacy lawsuit dates back to 2018 when it emerged that Cambridge Analytica had accessed data belonging to millions of Facebook users. 

The political consulting firm, which is now defunct, worked with President Donald Trump’s campaign team to win the 2016 US elections. The non-jury trial will run for eight days. It will focus more on board meetings and the 10-year-old events to establish how Facebook executed the 2012 privacy agreement. 

Meta shareholders sued Zuckerberg, demanding that he and the other defendants return over $8 billion paid by Meta as fines and other costs to the company after the scandal emerged. The amount includes a $5 billion fine paid to the FTC in 2019 after the regulator imposed a fine on Facebook for breaching the 2012 agreement. 

The shareholders also allege that when Zuckerberg suspected that the Cambridge Analytica Scandal was about to erupt and cause stocks to plunge, he offloaded his shares and reaped about $1 billion in profit. 

Data Privacy Scrutiny

The trial will be based on policies that Facebook used a long time ago. However, it comes at a time when the social media giant continues to face scrutiny over data privacy, particularly in training Meta AI models. The social media giant claims that since 2019, it has invested billions of dollars in programs that protect user privacy. 

According to the Head of Digital Content Next, Jason Kint, the case will provide details about what the company’s leadership knew about user data. 

Currently, Meta platforms have over 3 billion daily users. 

“There’s an argument that we can’t avoid Facebook and Instagram in our lives. Can we trust Mark Zuckerberg?” Kint said. 

Some of the notable defendants in this case include venture capitalist Marc Andreessen, former Facebook Chief Operating Officer Sheryl Sandberg, as well as Palantir Technologies co-founder Peter Thiel and Netflix co-founder Reed Hastings who formerly served as board members. 

The defendants, including Zuckerberg, have dismissed Meta board’s accountability claims, terming them as extreme in their court filings. The plaintiffs in the case include union pension funds like the California State Teachers’ Retirement System and individual investors. 

Burden of Proof

The plaintiffs in the case will have to prove a difficult claim to win the case. This means demonstrating that Facebook directors failed in their oversight duty. Sandberg and Zuckerberg have been accused of causing the social media firm to violate the law knowingly. 

Although the law in Delaware State protects directors and officers against bad decisions, it does not offer any safeguards for illegal ones, whether profitable or not. About two years ago, the defendants in the case attempted to dismiss it before trial, but the judge declined. 

“This is a case involving alleged wrongdoing on a truly colossal scale,” Judge Travis Laster, who handled the case at the time, said. 

The trial phase of the case will be overseen by Judge Kathaleen McCormick at the Court of Chancery. In their court filings, the defendants argue that the plaintiffs cannot provide the evidence required to support their claims. But in their pre-trial court filing, the plaintiffs claimed they can prove that Facebook continued executing deceptive privacy practices after the 2012 agreement under Zuckerberg’s instructions. 

Defendants said they will be providing proof that Facebook assembled a team to lead its privacy efforts and even hired an external compliance firm. They also said they will demonstrate that Zuckerberg applied a stock-trading plan that protects him against the insider-trading claim.