Zuckerberg and Meta Face Legal Battle over Alleged Sex Trafficking and Child Exploitation Negligence
A shareholder derivative lawsuit has been filed against Mark Zuckerberg and other officers and directors of Meta Platforms Inc., accusing them of breaching their fiduciary duties by allegedly failing to adequately address sex trafficking and child exploitation on their platforms, including Facebook, Instagram, and WhatsApp.
The case, brought by the Employees' Retirement System of the State of Rhode Island and other shareholders, was filed in the Delaware Chancery Court.
The lawsuit argues that Meta's leadership has neglected its responsibility to protect children and victims of sex trafficking, causing significant harm to the company's reputation and value.
The complaint was filed by several pension and investment funds that own Meta stock.
The lawsuit alleges that the failure of Meta's executives and directors to address these pressing issues has caused harm to countless victims and exposed the company to significant legal, regulatory, and financial risks. The plaintiffs are demanding the court hold Meta's leadership accountable and compel them to take immediate action to safeguard both the company's interests and the welfare of its users.
In June 2021, the Texas Supreme Court allowed three people who became entangled with their abusers through Facebook to sue, saying Facebook was not a "lawless no-man's-land" immune from liability for human trafficking.
Meta separately faces hundreds of lawsuits from families of teenagers and younger children who claimed to suffer mental health problems by becoming addicted to Facebook and Instagram. Some school districts have also filed lawsuits over the problem.
"We prohibit human exploitation and child sexual exploitation in no uncertain terms," it said in a statement on Tuesday. "The claims in this lawsuit mischaracterize our efforts to combat this type of activity. Our goal is to prevent people who seek to exploit others from using our platform."
Zuckerberg, the billionaire chief executive, told Congress in 2019 that child exploitation was "one of the most serious threats that we focus on."
The Rhode Island Employees' Retirement System and other plaintiffs in the case are seeking damages for Meta, as well as an injunction requiring the company to take immediate and comprehensive action to address sex trafficking and child exploitation on its platforms.
Damages are paid to the company, often by the officers' and directors' insurers, instead of to shareholders.
The case is Employees' Retirement System of the State of Rhode Island et al v Zuckerberg et al, Delaware Chancery Court, No. 2023-0304.
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