A recent court ruling has determined that Facebook founder Mark Zuckerberg and other former directors of the social media company must face claims related to privacy violations. The allegations include turning a blind eye to rampant privacy violations, including allowing a firm hired by Donald Trump’s 2016 presidential campaign to collect data on millions of users. The Delaware Chancery Court Judge Travis Laster concluded that alleged conflicts of interest meant Facebook’s board could not be trusted to properly investigate claims that the company repeatedly violated promises to protect users' personal information.
The privacy suits by investors were tied to a record $5 billion fine that Facebook officials, now a unit of Meta Platforms Inc., paid to the US government to resolve a privacy probe tied to a 2018 revelation about its business with Cambridge Analytica, a consulting firm hired by Trump. The government investigation stemmed from evidence that Cambridge Analytica improperly obtained data on tens of millions of Facebook users from a researcher who collected personal data through a third-party quiz app. The app not only collected its users' data but also information on their friends, affecting millions of consumers.
An internal review by Facebook later determined that at least 50 million user accounts were improperly harvested by Cambridge, according to investors' court filings. The Cambridge scandal dealt a blow to Facebook’s reputation at a time when the company was already under fire for allowing Russian agents to exploit its platform to try to influence the 2016 election.
Facebook investors contend that the privacy violations stretched back four years before the Cambridge news became public. They noted that the US Federal Trade Commission found alleged violations going back to 2012, the same year that Facebook finalized an earlier agreement over privacy lapses. Four months after that accord, the FTC said, Facebook removed a disclosure that information users shared with friends could get sucked up by the apps those friends used — while allowing the practice to continue.
Facebook shareholders alleged in their suits that company directors acquiesced to the violations to help the company make billions in advertising and data sales instead of ensuring that the firm protected users. The investors said in court filings that this complete and utter failure of leadership and governance left Facebook subject to public scrutiny, billions of dollars in lost market value, millions of dollars in foreseeable fines and costs, and inquiries by governments worldwide.
In conclusion, this ruling sets an important precedent for holding companies accountable for their actions and upholding promises to protect user privacy. It also serves as a reminder that companies must prioritize the protection of user data and not prioritize profits over their users' rights.