US Judge: Facebook May Have Improperly Handled Data Breaches

Vice Chancellor Joseph Slights of the Delaware Chancery Court has ruled that there’s a “credible basis” to infer that Facebook may have committed malfeasance in relation to data breaches, and that the social media giant must turn over to shareholders emails and other records about how it handles privacy issues, according to a report by Reuters.

The 57-page decision was released on Thursday (May 30), and was directly related to Facebook’s behavior regarding the 2015 Cambridge Analytica scandal. The judge also made note of the fact that Facebook at the time was under a U.S. Federal Trade Commission consent decree to improve its data security.

The breach didn’t become public until March 2018, and an ensuing one-day trial took place in March of this year.

“Evidence presented at trial provides a credible basis to infer the board and Facebook senior executives failed to oversee Facebook’s compliance with the consent decree and its broader efforts to protect the private data of its users,” Slights wrote.

The shareholders sued Facebook in September for the records, and said that if they found any wrongdoing they would sue company officers through a derivative lawsuit. A derivative lawsuit involves bringing a suit on behalf of a company, with money received from officers, directors and insurers, and the money going back into the company itself. 

Facebook shares took a huge hit and dove 19 percent last July when the company posted quarterly results after the scandal. It recently said it was going to pivot toward more privacy-centric ventures.

Cambridge Analytica was hired by the 2016 Donald Trump election campaign, and it utilized profiling techniques to influence voter behavior. After the breach came to light, the company shut down, and several investigations, both in the U.S. and the European Union, were launched.

Slights denied some requests by shareholders, saying they were too broad. The judge also didn’t say that any wrongdoing actually occurred, but that will be determined on another day.