A New Mexico Judge Orders Meta To Pay $25 Billion

A New Mexico judge has ordered Meta, the parent company of Facebook, to pay $25 billion in civil penalties, after a jury found the company misled the public in statements about the privacy of its users’ data. District Judge Francis J. Mathew, sitting in Santa Fe, issued the order on Wednesday. The state called it one of the largest verdicts in United States legal history.

In September, a Santa Fe jury found that 26 of 29 public statements at issue in the case were misleading, and counted 43,899,725 violations of New Mexico’s Unfair Practices Act. The statements, made over more than a decade, concerned how the company handled hate speech and user data — including data handed to Cambridge Analytica that was used to target voters for Donald Trump ahead of the 2016 election. Some of the statements were made by Meta’s chief executive, Mark Zuckerberg.

The law allows up to $5,000 per violation, which put the maximum at about $219.5 billion. Mathew applied the top per-violation penalty, pointing to what he called an “extraordinary number of willful violations” and the “clear intentional and systematic nature of Facebook’s repeated misstatements,” then reduced the total award to $25 billion. The state had asked for $35 billion to $40 billion. Meta had asked the judge to cap the penalty at $3.45 billion. Randi McGinn, an attorney for the state, told the court it “should speak to Meta in the only language it understands, which is money, and the value of its stock price.”

New Mexico filed the case in 2021, under Attorney General Raúl Torrez. It was not, in the end, a suit about the data harvesting itself: it targeted what Facebook told the public over the years about user data, privacy settings and content moderation. The harvesting grew out of the Cambridge Analytica scandal, which broke in 2018: a quiz app collected data from an estimated 87 million Facebook profiles, and the data passed to the political consultancy. Mathew described Facebook’s promised post-scandal investigation of app developers as “willfully ineffective.” In his order, he wrote: “To induce users to provide their personal information to Facebook, Facebook made many false promises respecting the security and control of that data over the course of more than a decade.”

The penalty is the largest yet to come out of the Cambridge Analytica affair. Meta previously agreed to a $5 billion settlement with the Federal Trade Commission in 2019 and a $725 million class-action settlement in 2022. This August, Meta reached an $18 billion settlement with the majority of the country’s attorneys general resolving claims about youth social-media harm and addiction. New Mexico had stayed out of a separate multistate settlement that included about $459 million for Cambridge Analytica claims, which left this case free to go to trial. The $25 billion owed to this one state exceeds that entire $18 billion multistate agreement. Torrez said Wednesday: “It has been a long time coming holding Big Tech accountable.”

Meta’s chief legal officer, C.J. Mahoney, said the company is “confident we will prevail on appeal.” The ruling, he said, makes it “all but impossible to do business in the state of New Mexico,” and “at its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online.” The order came down hours before Meta was scheduled to report its third-quarter financial results.

Sources: Bloomberg Law; The Wall Street Journal; USA Today; Fox Business; IAPP; Engadget.