Cambridge Analytica: Zuckerberg settles with shareholders to avoid trial

Mark Zuckerberg and his shareholders have reached a settlement to avoid trial in the Cambridge Analytica scandal. The terms of the settlement were not disclosed. The $8 billion class action lawsuit filed against Zuckerberg and other company executives accused Meta's executives of failing to disclose the risks associated with information used by Cambridge Analytica, one of the companies that supported Donald Trump's victory in his 2016 election campaign. The settlement was announced just as the second day of the trial was about to begin, with Judge Kathaleen McCormick adjourning the hearings and congratulating the parties. The shareholders demanded that Zuckerberg and other executives personally reimburse the company for all fines and legal fees, estimated at over $8 billion, in addition to the $5 billion fine already imposed by the FTC in 2019, and a $725 million class action lawsuit in 2022. Also in 2019, the Italian Data Protection Authority fined the Menlo Park company $1 million.

The protagonists

The $8 billion class action lawsuit was filed by Meta shareholders against Zuckerberg and other current and former executives of the company, including Sheryl Sandberg , Meta's former chief operating officer; Marc Andreessen , a venture capitalist and board member; Peter Thiel , a co-founder of Palantir Technologies and a former board member; and Reed Hastings , a co-founder of Netflix and a former board member.

The accusations

Shareholders accused Zuckerberg and other executives of repeatedly violating a 2012 agreement with the Federal Trade Commission to protect Facebook user data. The indictment alleged that the executives ran Facebook as an illegal enterprise, allowing the mass collection of personal data without consent.

The main charges were: violation of the 2012 FTC agreement on user data protection; failure to inform the markets about the risks arising from the misuse of data; and insider trading : Zuckerberg allegedly sold approximately $5 billion in shares before the scandal, predicting the stock's collapse.

The Cambridge Analytica scandal

The case dates back to 2018, when it emerged that Cambridge Analytica had collected data from approximately 87 million Facebook users without their consent. The British political consultancy, linked to Stephen Bannon, used this data to influence the 2016 US presidential election, which led to Donald Trump's victory. Cambridge Analytica had paid a Facebook app developer to access not only the data of users who had downloaded the app, but also the profiles of their "friends," violating the platform's policies.