Meta Platforms Wins Lawsuit Over Apple Privacy Changes

In a significant legal development, Meta Platforms, the parent company of Facebook and Instagram, has successfully dismissed a lawsuit that accused it of misleading shareholders regarding the impact of Apple’s privacy changes. This lawsuit claimed that Meta had concealed how these changes would affect the attractiveness of its platforms to advertisers, ultimately leading to a substantial drop in its stock price.

The lawsuit was brought forth by a group of shareholders, including four Israeli insurers and pension funds, who argued that Meta's stock plummeted by 53% within a year, erasing over $500 billion from the company's market value. They pointed to 17 statements made by Meta in 2021 and 2022 that they believed were false or misleading. However, U.S. District Judge Yvonne Gonzalez Rogers ruled against these claims, stating that the shareholders did not provide sufficient evidence to support their allegations.

Judge Rogers, in her 34-page ruling, noted that while Meta did eventually acknowledge that Apple’s privacy changes could create a $10 billion "headwind" in 2022, this admission did not prove that earlier statements were false. Furthermore, the judge dismissed claims regarding former Chief Operating Officer Sheryl Sandberg's use of company resources for personal matters, including her wedding and her book "Lean In," stating that these claims were based solely on press reports and lacked concrete evidence.

Additionally, the lawsuit included allegations that Meta's shift to the Reels feature, which mimics TikTok's short-form video format, would negatively impact its revenue due to fewer advertisements being displayed. However, the court found no proof that this transition had harmed Meta's financial performance.

In her decision, Judge Rogers emphasized, "The court determines plaintiffs have not plausibly alleged violations of federal securities law," and dismissed the lawsuit with prejudice, meaning it cannot be refiled. Other defendants in the case included Meta's Chief Executive Mark Zuckerberg, Chief Financial Officer Susan Li, and her predecessor David Wehner.

This ruling is a significant win for Meta, as it not only clears the company of these allegations but also reinforces the importance of having solid evidence when making claims in court. For investors and shareholders, this case serves as a reminder of the complexities involved in corporate governance and the legal landscape surrounding major tech companies. As the digital world continues to evolve, understanding the implications of privacy changes and their effects on business operations will be crucial for both companies and their investors.