Meta CEO Zuckerberg to testify in $8 billion trial over Cambridge Analytica fallout

Meta shareholders allege that CEO Mark Zuckerberg and former executives, including ex-COO Sheryl Sandberg, ignored a 2012 FTC consent decree, leading to repeated data privacy violations, most notably the 2018 Cambridge Analytica scandal

Meta CEO Mark Zuckerberg is expected to take the stand this week in a high-stakes shareholder lawsuit that accuses him and other former executives of failing to safeguard user data, resulting in billions in regulatory penalties. The non-jury trial, set to begin on Wednesday (July 16) in the Delaware Court of Chancery, could have major implications for Meta’s corporate governance and privacy practices.

The case, brought by shareholders of Meta Platforms Inc.—the parent company of Facebook, Instagram, and WhatsApp—alleges that Zuckerberg and other executives, including former COO Sheryl Sandberg, ignored a 2012 consent decree with the U.S. Federal Trade Commission (FTC) that required strict controls over user data handling. The plaintiffs claim that this neglect led to a series of privacy violations, most notably the Cambridge Analytica scandal in 2018.

That scandal involved the unauthorized access of personal data from millions of Facebook users by Cambridge Analytica, a now-defunct political consulting firm that worked on Donald Trump’s 2016 presidential campaign. As a result, Meta incurred over $8 billion in costs and penalties, including a record $5 billion fine from the FTC in 2019.

Other prominent figures named as defendants include venture capitalist and board member Marc Andreessen, Palantir co-founder Peter Thiel, and Netflix co-founder Reed Hastings—all of whom served on Meta’s board during the period in question. The shareholders argue that these individuals failed in their fiduciary duties by allowing Facebook’s data privacy practices to continue unchecked.

Meta leaders dismiss accusations

Zuckerberg and the other defendants have denied the allegations, characterizing them in court filings as “extreme” and lacking factual support. Despite an earlier attempt to have the case dismissed, Delaware Judge Travis Laster allowed it to proceed, citing "alleged wrongdoing on a truly colossal scale." The trial will now be overseen by Judge Kathaleen McCormick.

The court proceedings are expected to examine internal decisions and board meetings dating back more than a decade, focusing on how Meta’s leadership responded to regulatory obligations and growing privacy concerns. While the case is rooted in past actions, it unfolds amid ongoing scrutiny of Meta’s handling of personal data, especially in light of recent developments in AI model training.

Shareholders contend they can prove that Facebook’s misleading privacy practices continued even after regulatory warnings, raising serious questions about leadership accountability at one of the world’s most influential tech companies.