Written by: Haim Ravia, Dotan Hammer
Following the record-breaking $1.3 billion fine imposed by the Irish Data Protection Commission on Meta in 2023, two of Meta’s institutional shareholders, both pension funds, have filed suit against the company due to “improper handling of user data”.
The plaintiffs assert “credible suspicions” that the board of directors and senior leadership are responsible for the privacy violations, which resulted in multiple fines, lawsuits, and financial settlements with regulators. The plaintiffs are demanding access to Meta’s books and records to investigate these claims under the Delaware General Corporation Law. The plaintiffs point to Meta’s decision to continue transferring European user data to the U.S. without adequate risk mitigation, despite the Schrems II decision, whose aftermath led to the $1.3 billion fine.
The plaintiffs also enumerate a long list of privacy-related controversies that have impacted Meta, from the infamous Cambridge Analytica fiasco to the multitude of GDPR fines the company has been forced to pay in the last couple of years.
If the court finds that the board of directors and senior leadership breached their fiduciary responsibilities, they may be held personally liable for the damages incurred by Meta and its shareholders, potentially amounting to billions of dollars.
Click here to read the Demand for Inspection of Books and Records
