Meta Investors Reach $8 Billion Settlement with Zuckerberg, Ending Trial and Relieving Pressure on Delaware Courts

Meta Platforms investors reached a settlement with the company's leadership, ending an $8 billion trial and sparing Mark Zuckerberg from testifying about alleged data violations. The deal takes heat off Delaware, which has faced criticism from tech and business leaders. The settlement resolves a case that had the potential to fuel a trend of companies abandoning Delaware as their legal home.

Meta Platforms Inc. (META.O) shareholders and the company's leadership have reached a settlement, ending an $8 billion trial over alleged violations of Facebook users' data. The agreement, which was announced on July 21, 2025, spared Mark Zuckerberg from testifying and brought an end to a case that had the potential to accelerate a trend of companies abandoning Delaware as their legal home [1].

The trial, which was set to commence in Delaware's Court of Chancery, was adjourned on the second day after the legal team for the shareholder plaintiffs announced a settlement. The terms of the agreement are still being finalized, but it marks a significant resolution for both parties involved [2].

Meta shareholders alleged that current and former officers and directors of Facebook were liable for failing to protect users' data. They sought a court order for the defendants to use their personal fortunes to reimburse the company for the $8 billion in legal costs, including a $5 billion fine paid to the Federal Trade Commission in 2019 [1].

The settlement comes at a time when Delaware has been under scrutiny for its court rulings, which some business leaders argue favor shareholders over company founders. Last year, Elon Musk and other leaders criticized Delaware's courts, leading several companies, including Dropbox (DBX.O), Trump Media & Technology (DJT.O), Roblox (RBLX.N), and Simon Property Group (SPG.N), to reincorporate outside the state [1].

The Meta case, which involved 11 defendants including Zuckerberg, Sheryl Sandberg, Marc Andreessen, and Reed Hastings, added to the tension. A ruling that spared the defendants might have given the impression that the court caved to pressure, while one that favored the plaintiffs could have further fueled calls for companies to leave Delaware [1].

The settlement highlights the Delaware court's ability to handle complex cases and guide them to resolution, according to Lawrence Cunningham, director of the Weinberg Center for Corporate Governance in Delaware. "It was a very desired judicial outcome," he said [1].

In response to the criticism, Delaware's political leaders changed its corporate law to make it harder for shareholders to sue corporate boards over deals with controlling shareholders like Zuckerberg. However, some companies, like Affirm Holdings (AFRM.O), still opted to leave, citing uncertainty about how the changes would be interpreted by Delaware courts [1].

Meta's stock was trading 0.3% lower at the time of the settlement announcement, with retail sentiment around the stock remaining bullish [3]. The settlement follows a period of scrutiny for Meta, which has faced numerous privacy violations and regulatory fines. However, the company's stock has shown resilience, with a nearly 20% year-to-date increase and a 52% gain over the past 12 months [3].

References:
[1] Reuters. (2025, July 21). Meta investors, Zuckerberg reach settlement ending $8 billion trial over Facebook privacy violations. Retrieved from https://www.reuters.com/sustainability/boards-policy-regulation/meta-investors-settlement-with-zuckerberg-takes-heat-off-delaware-2025-07-21/
[2] Reuters. (2025, July 17). Meta investors, Zuckerberg reach settlement ending $8 billion trial over Facebook privacy violations. Retrieved from https://www.reuters.com/sustainability/boards-policy-regulation/meta-investors-zuckerberg-reach-settlement-end-trial-over-facebook-privacy-2025-07-17/
[3] Stocktwits. (2025, July 21). Mark Zuckerberg, Meta investors settle $8 billion Facebook privacy violation lawsuit. Retrieved from https://stocktwits.com/news-articles/markets/equity/mark-zuckerberg-meta-investors-settle-8-billion-facebook-privacy-violation-lawsuit/ch8KZgBR5pb