This week, in a courtroom at the Delaware Chancery Court, the trial officially began that pits Mark Zuckerberg and other heavyweights of Facebook against shareholders who accuse them of collecting user data in violation of a 2012 FTC agreement.
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With key witnesses, former executives, and billions of dollars at stake, the expectation is as intense as a “like” multiplied by millions.
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Witnesses on the stand: privacy under scrutiny
The first speaker was Neil Richards, a privacy expert from the Law School at the University of Washington. With almost surgical clarity, Richards dissected Facebook’s data policies and stated: “Facebook’s privacy disclosures were deceptive.”
Their testimony seeks to demonstrate that, behind the scenes, the social network manipulated the terms of use to exploit the personal information of its users without proper transparency.
Later on the same Wednesday, Jeffrey Zients, former White House Chief of Staff during the Biden administration and current advisor at Meta, will take the stand. Zients, who led the company between May 2018 and 2020, will provide his account of the internal decisions.
The accused billionaires: high-profile names
Not only Zuckerberg faces these accusations. The list of defendants includes well-known figures such as former COO Sheryl Sandberg; investor Marc Andreessen; and figures like Peter Thiel (cofounder of Palantir) and Reed Hastings (of Netflix).
All of them, the plaintiffs say, failed to oversee that Facebook complied with the agreement that prevented the misuse of data.
According to the lawsuit, these executives should reimburse Meta the $5 billion fine imposed by the FTC after the Cambridge Analytica scandal, as well as other legal expenses that would exceed $8 billion.
The context: from Cambridge Analytica to Caremark
This case has its roots in 2018, when it was revealed that Cambridge Analytica had accessed data from tens of millions of Facebook users to influence political campaigns. The FTC fined Zuckerberg’s company and demanded that it strengthen its privacy controls.
The novelty of the current lawsuit —known as a “Caremark claim”— is that it directly holds the board of directors accountable for omissions: a legal territory historically difficult to navigate in Delaware, although in recent years several courts have allowed these types of claims to move forward.
What to expect after the hearings
Judge Kathaleen McCormick, famous for rejecting Elon Musk’s multimillion-dollar package, will preside over the non-jury trial. It is expected that, once the testimony phase is completed, she will issue a ruling on liability and damages in several months.
Meanwhile, the shareholders are preparing their final arguments and the accused are sharpening their defense, claiming that Facebook had external audits and was deceived by Cambridge Analytica, as well as denying any use of insider information in the stock sales by Zuckerberg.
With witnesses such as Andreessen - who will testify on Thursday - and Zuckerberg himself, the legal battle will only intensify. What is clear is that, at the end of the trial, Meta’s empire could either come out empty-handed... or with a hefty bill.