Facebook shareholders have reportedly alleged that the social media giant overpaid $5 billion (roughly Rs. 36,928 crores) to the American antitrust watchdog to protect CEO Mark Zuckerberg from personal liability related to the Cambridge Analytica data leak probe. The shareholders said to have alleged in two lawsuits, which were filed last month but made public on Tuesday, that Facebook's board allowed the company to pay extra on top of the fine sought by the Federal Trade Commission (FTC) in 2019. The lawsuits, reportedly filed in Delaware, cite internal discussions among the board members. Cambridge Analytica, a political consulting firm, is said to have improperly obtained personal data of 87 million Facebook users for advertising during the 2016 US Presidential elections.
In a long Twitter thread, Jason Kint, the Chief Executive Officer of Digital Content Next, a trade group for digital content producers, outlined the major points of the lawsuits that together run over 600 pages. He called it the "mother of all lawsuits".
He primarily outlined four plaintiff allegations, which included Facebook spending billions to protect Zuckerberg personally and that the CEO misled the US Congress while appearing before it in connection with the Cambridge Analytica probe in April 2018.
The FTC began investigating Facebook in 2018, focusing on whether the company violated a legal agreement it had with the US government to keep its users' data private.
The complaints say the defendants, who include Facebook COO Sheryl Sandberg, were aware of the threat Facebook's “illegal course of conduct” posed to the company, which was akin to an “epic governance failure”.
On Insider trading allegations, Kint said they relate to hundreds of millions to billions made by insiders who would have been aware or neglected their governance duties.
Concluding the tread, the DCN chief said that everyone reading the posts should keep in mind that these are plaintiffs' claims.
The Twitter thread specifically points out an allegation the Facebook shareholders have made in the lawsuits that Zuckerberg, during his testimony before the US Congress, claimed Facebook doesn't collect data from other apps. Kint said, “It (the lawsuit) doesn't mince words. ‘The Zuckerberg testimony quoted in the immediately preceding paragraph is materially false and misleading'.”
On the same day the FTC settlement was announced, the Securities and Exchange Commission announced it would fine Facebook $100 million (roughly Rs. 7.38 crores) as part of a settlement.
This week on Orbital, the Gadgets 360 podcast, we discuss iPhone 13, new iPad and iPad mini, and Apple Watch Series 7 — and what they mean to the Indian market. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.