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Report Claims Facebook Overpaid On Its $5 Billion FTC Fine to Shelter Zuckerberg

Facebook Logo Nov 16 2018 AH
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Shareholders of Facebook have filed lawsuits against the company’s board members. They have alleged that the company overpaid on a recent $5 billion fine to the Federal Trade Commission (FTC). Two groups of Facebook board members have filed lawsuits, according to Politico. The lawsuits were filed with the Delaware Court of Chancery in August.

These lawsuits cite internal discussions between Facebook’s board members. Shareholders allege that the FTC sent a draft complaint to the company’s lawyers in February 2019. This complaint had the names of both Facebook and its CEO Mark Zuckerberg, the complaint said.

The FTC said in court that Facebook’s fine would have been close to $106 million, and not $5 billion, as per one of the lawsuits.

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One complaint in the FTC lawsuit against Facebook termed this a “quid pro quo”

“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,” one of the lawsuits states.

Notably, the FTC hasn’t publicly said it wanted to include Zuckerberg in its Cambridge Analytica data leak investigations. Moreover, two Democrats voted against the settlement due to the lack of personal liability for Zuckerberg.

“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,” one of the complainants said.

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Despite the hefty fine, Facebook has grappled with the menace of misinformation and disinformation on its platforms. In 2018, the company faced criticism for creating “shadow profiles” of people by using browser cookie data.

Zuckerberg denied the existence of shadow profiles in an April 2018 congressional hearing. However, other reports said that the company set up these profiles as a placeholder for a time when non-users want to join the platform.

The company came under fire from Senators at a hearing late last year over its internal user tracking tool known as Centra. Earlier this year, a federal judge threw out FTC’s antitrust case against Facebook. The original complaint alleged the company of killing the competition with aggressive acquisitions of rival companies.

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