What Meta’s US$8bn Settlement Says About Future of Privacy
Mark Zuckerberg, along with current and former directors of his company Meta, have agreed to settle a lawsuit brought to the courts by the company’s own shareholders.
The plaintiffs were seeking US$8bn in compensation for damage that Meta’s directors allegedly caused by allowing repeated violations of Facebook users' privacy.
The settlement was announced just one day into the trial in Delaware, preventing what would have been a rare opportunity to see Mark Zuckerberg answer probing questions under oath.
The parties did not disclose details of the settlement, with defence lawyers declining to address Delaware Court of Chancery Judge Kathaleen McCormick.
"This settlement may bring relief to the parties involved, but it's a missed opportunity for public accountability," says Jason Kint, CEO of Digital Content Next.
The Cambridge Analytica scandal
This lawsuit stems from revelations that data from millions of Facebook users was accessed by Cambridge Analytica, a political consulting firm that worked for Donald Trump's 2016 presidential campaign.
Those revelations led to a record US$5bn Federal Trade Commission fine in 2019 after the regulator found Facebook failed to comply with a 2012 agreement to protect users' data.
In the lawsuit, Meta’s investors alleged that the company’s former and current board members completely failed to oversee the company's compliance with that 2012 FTC agreement.
The shareholders also claimed that Mark Zuckerberg and Meta’s former Chief Operating Officer Sheryl Sandberg knowingly ran Facebook as an illegal data harvesting operation.
Author and academic Shoshana Zuboff, who railed against Facebook’s role in the scandal in her 2018 book The Age of Surveillance Capitalism, believes that the actions of large tech companies are destabilising politics.
“Democracy is on the ropes in the UK, US and many other countries,” she explains.
“Not in small measure because of the operations of surveillance capitalism.”
High-profile defendants avoid testimony
The settlement allowed 11 defendants to avoid testifying, including billionaire venture capitalist Marc Andreessen, who was scheduled to testify on the day the settlement was announced.
Other defendants included Peter Thiel, Co-Founder of Palantir Technologies, and Reed Hastings, Co-Founder of Netflix.
Sheryl Sandberg, who was sanctioned during litigation for deleting what were likely her most sensitive emails, was also scheduled to testify.
Jeffrey Zients, a former board member who served as President Joe Biden's White House Chief of Staff, had testified that the company did not agree to the FTC fine to spare Zuckerberg legal liability.
A missed opportunity for accountability
Legal experts suggested the settlement represents a missed chance for public understanding of Meta's practices.
“One thing that could have come out of a full trial is a full accounting of how Facebook came to adopt and approve any illegal practices,” says Ann Lipton, a law professor at the University of Colorado.
“It's valuable for society to know how this happened and what went wrong, if they were breaking the law. That kind of exposure serves a valuable social purpose. We won't get that accounting now.”
Shoshana believes that Meta and its leadership team have made shirking accountability a business strategy.
“A man like Mr Zuckerberg, who has absolute control over Facebook, now essentially has absolute control over critical communications infrastructure that involves billions of people,” she says.
“And there is no countervailing force and no countervailing power when it comes to Mr Zuckerberg and his decision rights.”
What this means for future data privacy cases
Meta was not a defendant in the lawsuit and declined to comment on the settlement.
The company has stated on its website that it has invested billions of dollars into protecting user privacy since 2019.
However, the undisclosed settlement terms mean the extent of any admission of wrongdoing or commitment to future reforms remains unclear.
The settlement resolves what shareholders call “extreme claims” while allowing Meta's leadership to avoid the public scrutiny that a full trial would have provided.
"Facebook has successfully remade the Cambridge Analytica scandal about a few bad actors rather than an unravelling of its entire business model of surveillance capitalism and the reciprocal, unbridled sharing of personal data," says Jason Kint.
"That reckoning is now left unresolved."
While the settlement is a victory for the plaintiffs, the Facebook users whose data was in question will receive no such compensation.
The drawn-out legal proceedings here have also been cited as an obstacle to justice in the future.
“The lawsuit was filed in 2018. Settlement reached in 2025,” says Jason Grad, CEO at Massive.
“During those 7 years, Meta made US$1.1tn in revenue while fighting this case and its market cap grew from US$374bn to US$1.77tn.
“Regulation moves so slowly that breaking rules early and paying later is often the optimal business strategy.”
