Zuckerberg, Meta Directors Will Pay $190 Million Over Data-Privacy Violations

None of the defendants will personally pay any of the settlement cost, which will be covered by their corporate liability insurance policies.

Meta CEO Mark Zuckerberg in Washington on Jan. 31, 2024. Madalina Vasiliu/The Epoch Times

Mark Zuckerberg, the CEO of Meta Platforms, Inc., and several other former officers and directors of the company, have agreed to personally pay $190 million to the company as part of a settlement agreement with shareholders to end a multibillion-dollar class-action lawsuit about data-privacy violations by social media platform Facebook.

The deal was unveiled on Nov. 20 and ended a trial in the Delaware Court of Chancery, one of the most high-profile business law fora in the United States, where several shareholders of Meta had filed a derivative lawsuit seeking $8 billion in compensation. Apart from Zuckerberg, the defendants in the case included several billionaires such as venture capitalist Marc Andreessen, businesswoman Sheryl Sandberg, investor Peter Thiel, and Netflix CEO Reed Hastings, all of whom have either served on Meta’s board of directors or, in the case of Sandberg, worked for the company as a senior executive.

The shareholders were not only individuals but also large institutional investors, such as the California State Teachers’ Retirement System. They had argued that Facebook, in letting the data of millions of users be accessed by British research firm Cambridge Analytica to create targeted advertisements in favor of President Donald Trump during the 2016 presidential election, violated their fiduciary duties to the company.

The scandal surrounding the activities of Cambridge Analytica, which was first publicized in 2018, led to a torrent of criticism of large social media companies about their management of users’ data and privacy protections. The U.S. Federal Trade Commission (FTC) investigated Meta—which was still named Facebook, Inc. at the time—and levied a fine of $5 billion against the company for its actions, which was then the largest ever fine imposed by the FTC for data-privacy violations.

The settlement in the current case was described as the second-largest settlement ever reached in a shareholder derivative lawsuit.

None of them will personally pay for the settlement costs, which will be covered by their corporate liability insurance policies. The plaintiffs’ attorneys will receive 30 percent of the settlement in legal fees and $4.8 million for litigation expenses.

“When we leverage our voice and use tools such as litigation effectively, it benefits both companies and shareholders long-term,” said California State Teachers’ Retirement System Board Chair Denise Bradford in a statement.

Zuckerberg, the wealthiest defendant, has a net worth of $202.3 billion, and, at the time of writing, is the sixth-richest man in the world, according to Forbes.

Reuters contributed to this report.