Facebook Paid FTC Multibillion In Fine To Protect Zuckerberg, Shareholders Say

Facebook has agreed to pay billions more in addition to an initial fine requested by the Federal Trade Commission in 2019 to protect CEO Mark Zuckerberg from personal liability in a massive data breach investigation, according to shareholders in a pair of lawsuits made public on Tuesday.

In lawsuits filed in Delaware Chancery Court last month, two shareholder groups cited internal discussions between members of Facebook’s board of directors alleging they had authorized a $ 4.9 billion overpayment. dollars from the fine to protect Zuckerberg, the company’s co-founder and largest shareholder, and COO Sheryl Sandberg. The lawsuits were reported earlier by Politico.

“Zuckerberg, Sandberg and other Facebook administrators have agreed to allow a multi-billion settlement with the FTC as express consideration to protect Zuckerberg from being named in the FTC’s complaint, from being subjected to personal responsibility or even being compelled to sit for a deposition. , “one of the alleged lawsuits.

The FTC began investigating Facebook in 2018 after revelations that Cambridge Analytica, a British political consultancy, had accessed the data of 87 million Facebook users without their permission. The agency’s investigation focused on whether Facebook violated a legal agreement he had with the US government to keep his users’ data private.

Zuckerberg was named a co-accused in a draft complaint the FTC sent to Facebook in early 2019, according to the partially drafted lawsuit. The complaint alleges that Facebook’s attorneys determined the company faced a fine of close to $ 107 million, but the company’s board of directors agreed to pay a fine of $ 5 billion in exchange for preventing Zuckerberg and Sandberg from being named in the settlement.

The lawsuit notes that on the same day the FTC settlement was announced, the Securities and Exchange Commission announced that it would fine Facebook $ 100 million in a settlement related to its investigation into the data processing by the social network.

“The board has never seriously verified Zuckerberg’s unhindered authority,” shareholders said in one of the lawsuits. “Instead, it empowered him, defended him, and paid billions of dollars out of Facebook’s corporate coffers to make his problems go away.”

Facebook and the FTC did not immediately respond to requests for comment.