27 September, 2021

Facebook buys Zuckerberg a $5 billion GET OUT OF JAIL FREE card

icon facebook,ftc,Zuckerberg
Facebook buys Zuckerberg a $4.9 billion GET OUT OF JAIL FREE card

"A lawsuit accuses Facebook’s board of overpaying the Federal Trade Commission billions of dollars in exchange for not personally suing CEO Mark Zuckerberg over the 2018 Cambridge Analytica data leak scandal."

How do CEOs like Zuckerberg get away from being held responsible for their actions? What responsibility do the corporate board of directors have to their shareholders? What happens when regulatory agencies are politicized? Follow the money and connections. Click on this map for clues.

Facebook buys Zuckerberg a $5 billion GET OUT OF JAIL FREE card

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Facebook pays to protect Zuckerberg with shareholder funds

"The plaintiffs in the suits, which were filed publicly in the Delaware Court of Chancery in August, are Facebook shareholders, including pension funds for teachers, firefighters, police, nurses, judges, as well as a construction workers’ union. They accuse Zuckerberg, Facebook COO Sheryl Sandberg, and Facebook board members Marc Andreessen and Peter Thiel of counts related to breach of fiduciary duty."

“... 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,” reads the complaint filed by Rhode Island’s pension fund, which has since been consolidated with two other shareholder complaints. They specifically accuse the company of overpaying by agreeing to settle for $4.9 billion more than Facebook’s maximum penalty." - Gizmodo

Delay, Deny and Deflect: How Facebook’s Leaders Fought Through Crisis

"Inside Facebook’s Menlo Park, Calif., headquarters, top executives gathered in the glass-walled conference room of its founder, Mark Zuckerberg. It was September 2017, more than a year after Facebook engineers discovered suspicious Russia-linked activity on its site, an early warning of the Kremlin campaign to disrupt the 2016 American election. Congressional and federal investigators were closing in on evidence that would implicate the company.

But it wasn’t the looming disaster at Facebook that angered Ms. Sandberg. It was the social network’s security chief, Alex Stamos, who had informed company board members the day before that Facebook had yet to contain the Russian infestation. Mr. Stamos’s briefing had prompted a humiliating boardroom interrogation of Ms. Sandberg, Facebook’s chief operating officer, and her billionaire boss. She appeared to regard the admission as a betrayal." - NY Times

Facebook paid $5Billion to protect Zuckerberg
Jason Kint - Twitter

Flagrant Facebook violations ignored

"As the Federal Trade Commission handed down a $5 billion fine against Facebook over its privacy dealings, the agency’s two Democratic members have argued the record-breaking penalty isn’t enough. Commissioners Rohit Chopra and Rebecca Kelly Slaughter voted against the settlement, which was approved in a 3-2 vote, saying it doesn’t go far enough and should have included a higher penalty. The commissioners also believe the FTC should have named CEO Mark Zuckerberg as a defendant in its settlement.

Chopra blasted the FTC decision, saying it “gives Facebook a lot to celebrate.” He said the FTC decision won’t stop Facebook from engaging in repeat privacy abuses and questioned why the settlement gives Facebook immunity for known and unknown privacy violations. In his dissenting opinion, Chopra said he “strenuously objects” to the FTC’s decision to clear Zuckerberg and other Facebook executives from potentially being held liable for the company’s privacy missteps.

“I wanted to investigate further, really uncover what was on the executives’ and the directors’ minds, who was calling the shots, what was their motives,” the Democrat said. “If we don’t even get those answers, how are we going to really know what really happened?”

Slaughter raised concerns that it didn’t come down hard enough on Facebook and may not “effectively deter” the company from engaging in future privacy violations. She also alleged there was “sufficient evidence” to name Zuckerberg in the lawsuit. “Rather than accepting this settlement, I believe we should have initiated litigation against Facebook and its CEO Mark Zuckerberg,” Slaughter said in her dissenting statement. “The Commission would better serve the public interest and be more likely to effectively change Facebook by fighting for the right outcome in a public court of law.” - CNBC

TakeAway: Tech CEOs like Zuckerberg walk away from the damage they do to democracy by paying with shareholder money to 'get out of jail free' card. Follow the money and political favors with a power map.


Image credit: Flickr Photo

Editorial cartoons

Facebook allowed Cambridge Analytica to erode democracy and fair elections.
Facebook allowed Cambridge Analytica to erode democracy and fair elections.
Facebook is destroying democracy and free speech.
Facebook and Zuckerberg ignore their ethical responsibilities.
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