Mark Zuckerberg is expected to testify this week in a high-stakes, $8 billion lawsuit accusing him and other Meta executives of running Facebook as an illegal entity that allowed user data to be collected without proper consent.
The lawsuit, filed by Meta shareholders, claims that Zuckerberg and other current and former leaders repeatedly violated a 2012 agreement between Facebook and the U.S. Federal Trade Commission (FTC) meant to safeguard user privacy, according to Reuters.
The Case Stems from the Cambridge Analytica Scandal
The case dates back to 2018, when it was revealed that Cambridge Analytica, a political consulting firm that worked on Donald Trump’s 2016 presidential campaign, had gained access to the personal data of millions of Facebook users.
Shareholders are demanding that Zuckerberg and the other defendants reimburse Meta for over $8 billion in damages, including the record $5 billion fine levied by the FTC in 2019 for violating the 2012 settlement.
Among the named defendants are Sheryl Sandberg, former COO; Marc Andreessen, investor and board member; and former directors Peter Thiel and Reed Hastings, Netflix’s co-founder.
Zuckerberg and the other defendants have denied all allegations in court filings, calling the claims "exaggerated."
Trial Set for Eight Days in Delaware
The trial, held without a jury in Wilmington, Delaware, is expected to last eight days. It will focus on internal board meetings and decisions made nearly a decade ago regarding how Facebook implemented the 2012 privacy agreement.
Though the case revolves around historical policies, it comes at a time when privacy concerns still surround Meta, particularly regarding how it trains its AI models. Meta has claimed to invest billions since 2019 in strengthening its user privacy program.
Jason Kint, CEO of Digital Content Next, said the case could shed light on what Meta’s board knew — and when — about user data for a platform that now serves over three billion daily users.
“There’s an argument that we can’t live without Facebook and Instagram,” Kint said. “The question is: Can we trust Mark Zuckerberg?”
One of the Hardest Corporate Cases to Prove
Two years ago, the defendants tried to have the case dismissed, but Judge Travis Laster allowed it to proceed, calling it a case of "alleged wrongdoing on a truly vast scale." The trial is now overseen by Chancellor Kathaleen McCormick.
The plaintiffs — including individual investors and union pension funds such as the California State Teachers’ Retirement System (CalSTRS) — face a high legal bar. They must prove a failure of board oversight, one of the most difficult allegations in corporate law.
The suit claims that Zuckerberg and Sandberg willfully allowed the company to violate the law. While Delaware law protects directors from bad business decisions, it does not protect illegal conduct — even if it’s profitable.
Defendants argue that plaintiffs have no hard evidence, but shareholders maintain they can prove Facebook continued deceptive privacy practices after the 2012 agreement, under Zuckerberg's direct leadership.
The defense says Facebook created a privacy oversight team, hired an outside compliance firm, and was itself misled by Cambridge Analytica.
Accusations of Insider Trading
In addition to the privacy claims, plaintiffs allege that when Zuckerberg became aware of the looming Cambridge Analytica scandal and its potential impact on Meta’s stock price, he sold shares — allegedly netting at least $1 billion.
Defendants counter that the sales were executed under a pre-approved trading plan designed to shield executives from insider trading allegations.
