Facebook must face lawsuit over Cambridge Analytica
Board members can’t be trusted to probe privacy violation claims, a judge rules.
A judge ruled that Facebook founder Mark Zuckerberg and other former directors of the social media company must face claims they turned 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.
Delaware Chancery Court Judge Travis Laster concluded Wednesday that alleged conflicts of interest meant that Facebook’s board couldn’t be trusted to properly investigate claims that the company repeatedly violated promises to protect users’ personal information.
Facebook directors either “affirmatively went along with” improper behavior or ignored it, the judge said in an oral ruling.
The privacy suits by investors were tied to a record $5-billion fine that Facebook — now a unit of Meta Platforms — paid the U.S. government to resolve a privacy investigation 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 thirdparty quiz app. The app collected not only 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 Analytica, according to investors’ court filings.
In December, Meta agreed to pay $725 million to settle investor claims in California tied to the scandal.
Dave Arnold, a Facebook spokesman, declined to comment on Laster’s ruling.
The Cambridge Analytica 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 inf luence the 2016 election. But Facebook investors contend that the privacy violations stretched back four years before the Cambridge Analytica news became public.
They noted the Federal Trade Commission found alleged violations dating to 2012, the year Facebook finalized an earlier agreement over privacy lapses. Four months after that accord, the FTC said, Facebook removed a disclosure that information that users shared with friends could get sucked up by the apps those friends used — while letting the practice continue.
Facebook shareholders alleged in their suits that company directors acquiesced to the violations to help Facebook make billions in advertising and data sales instead of ensuring that the company protected users.