Meta Platforms shareholders have initiated a derivative lawsuit seeking over $8 billion in damages from CEO Mark Zuckerberg, former COO Sheryl Sandberg, and other current and past executives. The case, now in court in Delaware’s Chancery Court, accuses them of breaching the 2012 FTC consent decree by allowing illegal user-data harvesting, culminating in the 2018 Cambridge Analytica scandal and Meta’s $5 billion FTC fine
The complaint asserts that Meta’s leaders “intentionally” failed to prevent misleading privacy disclosures, exposing the company to penalties and settlements totaling over $8 billion .
Trial Underway with High-Profile Testimonies
The non-jury trial began July 16, presided over by Chancellor Kathaleen McCormick. Neil Richards, a privacy law professor at Washington University, spoke for the plaintiffs, saying “Facebook’s privacy disclosures were misleading”
Testimony is expected from key figures:
- Mark Zuckerberg — accused of insider trading, allegedly selling shares ahead of the scandal
- Sheryl Sandberg, former COO.
- Board members Marc Andreessen, Peter Thiel, Reed Hastings, and directors like Jeffrey Zients — each alleged to have disregarded oversight duties Business Insider
Why This Is a Legal Landmark
- Caremark Oversight Claim: This is one of the rare Caremark lawsuits holding directors personally accountable for failing to supervise legal compliance — historically difficult to win
- CEO Liability: Zuckerberg could be forced to reimburse fines and legal costs if found liable — significant precedence for leadership accountability
- Broader Governance Impact: The trial may pressure other companies to strengthen compliance frameworks and alter how corporate boards are held responsible under Delaware law
Defense Claims and Corporate Response
Defendants claim that Facebook engaged external consultants to manage compliance, arguments blaming Cambridge Analytica’s deceit, and say they followed trading protocols — citing that Zuckerberg used automatic trading plans Reuters
Meta itself is not a defendant but has stated it has invested billions in privacy measures since 2019
What Comes Next
The trial is scheduled to last several weeks, with rulings expected several months after closing arguments. Possible outcomes include:
- Executives held personally liable or not — setting precedent.
- Delaware corporate governance shift — courts may revisit director oversight frameworks.
- Ripple effects — other shareholders could initiate similar cases amid data-privacy pressures.
✅ Conclusion
With an $8 billion claim underway, Meta’s executives face intense scrutiny over alleged systemic failures in data privacy governance. The case stands as a potential turning point in corporate accountability and may redefine director duties in the AI-data era.
