Facebook overpaid billions in FTC fines to protect Zuckerberg, shareholders claim

    0
    105

    Facebook boss Mark Zuckerberg testified at a hearing on Capitol Hill in 2018 about the Cambridge Analytica data leak.

    Getty Images

    Facebook has agreed to pay an additional billions of dollars in addition to an initial fine requested by the Federal Trade Commission in 2019 to protect CEO Mark Zuckerberg from personal liability related to a massive investigation into data breaches, shareholders allege in two lawsuits published on Tuesday.

    In lawsuits filed in the Delaware Chancery Court last month, two groups of shareholders cite internal discussions among Facebook board members alleging they overpayed the fine of $ 4.9 billion Approved to protect Zuckerberg, the company’s co-founder and largest shareholder, and COO Sheryl Sandberg. The lawsuits were previously reported by Politico.

    Get the CNET Daily News newsletter

    Find out about the biggest news in minutes. Delivered on working days.

    “Zuckerberg, Sandberg, and other Facebook directors agreed to approve a billion dollar settlement with the FTC in express consideration to protect Zuckerberg from being named in the FTC’s complaint, personally liable, or even sitting for a dismissal,” alleged one of the lawsuits.

    The FTC began an investigation into Facebook in 2018 after revelations surfaced that Cambridge Analytica, a UK policy advisory firm, accessed data on up to 87 million Facebook users without their permission. The agency’s investigation focused on whether Facebook violated a legal agreement it entered into with the U.S. government to keep its users’ data private.

    Zuckerberg was named as a co-defendant in a draft complaint that the FTC sent to Facebook in early 2019, as the partially edited lawsuit alleges. The complaint alleges that Facebook’s attorneys found the company facing a fine of closer than $ 107 million, but the company’s board of directors did agreed to pay a $ 5 billion fine in return for the fact that Zuckerberg and Sandberg are not mentioned in the settlement.

    The lawsuit states that the same day the FTC agreement was announced, the Securities and Exchange Commission fined Facebook $ 100 million as part of a settlement related to its investigation into its dealings with announced the data through the social network.

    “The board of directors has never seriously examined Zuckerberg’s absolute authority,” said shareholders in one of the lawsuits. “Instead, it enabled him to defend him and paid billions of dollars from Facebook’s corporate coffers to solve his problems.”

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

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here