Meta Platforms Inc. and a group of shareholders have reached a confidential settlement in a high-profile $8 billion lawsuit over Facebook’s privacy failures, sparing CEO Mark Zuckerberg from testifying in court.
The lawsuit, which sought $8 billion (£6 billion) in damages, was resolved just before the second day of trial in a Delaware court.
The terms of the settlement remain confidential. A lawyer for the shareholders announced the agreement on Thursday, while Meta declined to comment.
Zuckerberg at the centre of Cambridge Analytica fallout
Shareholders alleged that Zuckerberg’s leadership contributed directly to the Cambridge Analytica scandal, in which the political consulting firm improperly accessed the data of millions of Facebook users.
The plaintiffs had asked the judge to compel 11 current and former Meta directors to reimburse the company for more than $8 billion in fines and legal costs tied to privacy violations.
The suit also questioned the timing of certain stock sales by top executives.
High-profile defendants avoid testimony
The case named several high-profile defendants, including Netflix co-founder Reed Hastings, Palantir co-founder Peter Thiel, and former White House chief of staff Jeffrey Zients, who served as a Meta director from May 2018.
Zients testified on Wednesday that the $5 billion penalty imposed by the Federal Trade Commission was substantial, but claimed Meta paid it to shield Zuckerberg from personal liability.
The settlement means that the defendants will avoid further sworn testimony.
Former COO Sheryl Sandberg had also been scheduled to testify.
Loss of transparency
Legal experts say the settlement deprives the public of a full account of how Meta approved practices that may have breached privacy laws.
“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’s response and regulatory history
Although not a direct party to the suit, Meta has said it invested billions in privacy reforms since 2019.
Delaware Chancellor Kathaleen McCormick had been expected to preside over the trial through next week.
She previously gained attention for rejecting Elon Musk’s $56 billion Tesla compensation package, prompting Tesla to reincorporate in Texas.