Explained: What Is Rs 68,760 Crore Trial Against Mark Zuckerberg And Top Meta Platforms Leaders All About?

A huge lawsuit worth about Rs 68,760 crore ($8 billion) has started against Mark Zuckerberg and other top current and former leaders of Meta Platforms, Facebook’s parent company.

Shareholders accuse Zuckerberg and others of illegally harvesting Facebook user data, violating a 2012 agreement with the US Federal Trade Commission (FTC) that required the company to protect user privacy.

This follows the Cambridge Analytica scandal, when data from millions of users was misused for political advertising, including Donald Trump’s 2016 campaign.

What is the case about?

The Cambridge Analytica scandal was a major data privacy controversy involving Facebook. It came to light in 2018 when it was revealed that a political consulting firm, Cambridge Analytica, had collected personal data from millions of Facebook users without their knowledge or consent.

This was done through a quiz app that a few lakh users downloaded, but the app also accessed the data of their Facebook friends, reaching up to 87 million people.

The firm used this data to create detailed voter profiles and allegedly targeted political ads during the 2016 US presidential election. The scandal led to a global backlash, a $5 billion fine for Facebook by the US Federal Trade Commission, and raised serious concerns about how tech companies handle user data.

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Who are the key people involved?

The case will feature testimony from Zuckerberg, former COO Sheryl Sandberg, venture capitalist Marc Andreessen, and former board members Peter Thiel and Reed Hastings. Jeffrey Zients, President Biden’s chief of staff and a former Meta board member, is also expected to testify.

What do the shareholders want?

They want these leaders to reimburse Meta for the $5 billion FTC fine and other legal costs, totalling more than $8 billion.

What do the defendants say?

They deny wrongdoing, calling the claims “extreme.” They argue Facebook hired outside experts to comply with the FTC agreement and was itself a victim of Cambridge Analytica’s deceit.

Plaintiffs allege Zuckerberg knew the scandal would hurt the stock price and sold shares worth at least $1 billion before the news became public. The defence says he followed a preset trading plan that prevents insider trading.

Why is this case important?

This is the first trial of its kind accusing board members of deliberately failing to oversee a company. Such claims are considered very difficult to prove in Delaware corporate law. For comparison, Boeing’s directors settled a similar lawsuit in 2021 for $237.5 million without admitting wrongdoing.

What happens next?

The trial is taking place in Delaware’s Chancery Court before Chief Judge Kathaleen McCormick. After it ends, the judge is expected to rule on liability and any damages in the coming months.