Facebook overpaid FTC fine to safeguard Zuckerberg, lawsuit claims

Washington, D.C. - Facebook allegedly paid more than $5 billion to the Federal Trade Commission (FTC) to keep the organization from coming after the CEO Mark Zuckerberg in the 2018 privacy scandal, according to two lawsuits filed by shareholders.

Facebook CEO Mark Zuckerberg testifies virtually at a hearing of the US Senate Committee on Commerce, Science, and Transportation on October 29, 2020.
Facebook CEO Mark Zuckerberg testifies virtually at a hearing of the US Senate Committee on Commerce, Science, and Transportation on October 29, 2020.  © IMAGO/ZUMA Wire

The lawsuit, filed in the Delaware Court of Chancery, was made public courtesy of the chief executive officer of Digital Content Next, Jason Kint, who called it the "mother of all lawsuits."

The complaint was filed by the shareholders of the company, who brought charges against chief operating officer Sheryl Sandberg, as well as board members Marc Andreessen and Peter Thiel for breaching fiduciary duty.

According to Forbes, Facebook paid $5 billion to the FTC to clear Zuckerberg, while the estimated fine would've been only around $100 million.

The Cambridge Analytica data breach scandal has been haunting the company since it came to the surface in 2018. The allegation was that Facebook could not keep user data private, arguing that it was used by Cambridge Analytica to influence the 2016 presidential election.

"Zuckerberg, Sandberg, and other Facebook directors agreed to authorize a multi-billion settlement with the FTC as an express quid pro quo to protect Zuckerberg from being named in the FTC's complaint, made subject to personal liability, or even required to sit for a deposition," read one of the lawsuits filed.

Facebook Inc. keeps finding its way back into rough legal waters.
Facebook Inc. keeps finding its way back into rough legal waters.  © 123RF/sirajahmad

The complaints were filed in 2020, but were amended by the plaintiffs after a federal judge had ordered the organization to provide internal files from the board meeting on privacy.

According to Politico, one of the shareholders who filed the lawsuits, said, "The Board has never provided a serious check on Zuckerberg's unfettered authority. Instead, it has enabled him, defended him, and paid billions of dollars from Facebook's corporate coffers to make his problems go away."

This news is bound to increase the tensions in the organization as problems keep on piling up.

Facebook is also plagued with other severe allegations of privacy failures and antitrust.

Recently, the company was reprimanded for overlooking the negative effects its subsidiary app Instagram leaves on the mental health of young children.

Cover photo: IMAGO/ZUMA Wire

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