WILMINGTON, Del. – Meta CEO Mark Zuckerberg is set to take the stand this week in a high-stakes $8 billion shareholder lawsuit accusing him and other executives of turning Facebook into an “illegal enterprise” that systematically violated user privacy.
The Lawsuit: A Decade of Data Scandals Comes to a Head
The case stems from Facebook’s 2012 settlement with the Federal Trade Commission (FTC), which required the company to strengthen user data protections. But shareholders allege Zuckerberg and other leaders repeatedly ignored those obligations, culminating in the 2018 Cambridge Analytica scandal, where data from 87 million users was harvested without consent to influence elections.
Meta paid $5 billion in 2019—the largest FTC fine ever—to settle privacy violations, along with other penalties. Now, investors, including California’s State Teachers’ Retirement System, want Zuckerberg and ex-COO Sheryl Sandberg to personally reimburse the company for those costs, claiming they breached fiduciary duties.
Star-Studded Defendants & Unprecedented Legal Test
The defendants include venture capitalist Marc Andreessen, Netflix co-founder Reed Hastings, and Palantir’s Peter Thiel—all former Facebook board members. They’ve dismissed the claims as “extreme,” but Delaware’s Court of Chancery let the case proceed, with Judge Kathaleen McCormick presiding.
Legal experts say this is the first trial testing whether corporate directors can be held liable for failing to oversee compliance. If shareholders win, it could set a precedent for holding tech executives personally accountable for privacy violations.
Why This Trial Matters Now
While the case focuses on old scandals, it lands as Meta faces fresh scrutiny over AI data practices. The company insists it has spent billions on privacy safeguards since 2019, but critics argue Zuckerberg’s past decisions eroded trust.
“Can we trust Mark Zuckerberg?” asked Jason Kint of Digital Content Next, noting Meta’s platforms now serve 3 billion daily users. The trial may reveal what Facebook’s board knew—and when—about privacy risks.