Meta Platforms (META.O) won the dismissal of a lawsuit alleging it defrauded shareholders by hiding the impact of changes to Apple’s (AAPL.O) privacy settings on the desirability of Facebook and Instagram for advertisers. U.S. District Judge Yvonne Gonzalez Rogers ruled on Tuesday that Meta did not conceal former Chief Operating Officer Sheryl Sandberg’s use of company resources for personal matters, such as her wedding and her best-selling book Lean In.
Judge Rogers also dismissed claims that Meta knew its transition to Reels, which mimicked TikTok’s short-form video format, would negatively affect revenue by offering fewer ads per hour compared to older formats. Shareholders, led by four Israeli insurers and pension funds, had challenged 17 allegedly false and misleading statements made by Meta in 2021 and 2022. They claimed that Meta’s stock price dropped 53% in less than a year, erasing over $500 billion of the company’s market value.
In her 34-page decision, Rogers stated that Meta’s later admission of a potential $10 billion impact from Apple’s iOS privacy changes did not prove that earlier disclosures were false. She noted that the claims about Sandberg originated solely from press reports and were unproven. Furthermore, she found no evidence that the shift to Reels harmed Meta’s financial performance.
“The court determines plaintiffs have not plausibly alleged violations of federal securities law,” Rogers wrote.
The court dismissed the lawsuit with prejudice, meaning it cannot be refiled. Other defendants included Sandberg, Chief Executive Mark Zuckerberg, Chief Financial Officer Susan Li, and her predecessor David Wehner. Lawyers for the plaintiffs did not immediately respond to requests for comment on Wednesday. Meta had no immediate comment.
The case, which involves a different named plaintiff, is Plumbers and Steamfitters Local 60 Pension Trust v. Meta Platforms Inc., U.S. District Court, Northern District of California, No. 22-01470.
