Meta ordered to pay New Mexico $25 billion for deceiving users about privacy on Facebook
A judge on Wednesday ordered Meta to pay New Mexico $25 billion after a jury found the company liable for deceiving users about privacy on Facebook, marking the biggest fine ever against the tech giant.
Facebook’s deception was intentional and executives consistently misled users about how the platform worked, state District Court Judge Francis J. Mathew wrote in his ruling.
“Facebook promised users that they (the users) controlled their data. This was false,” he said.
Jurors in September found Meta liable for over 43 million violations of New Mexico consumer protection laws for making misleading public statements about how it handled users’ personal data. The case was brought after political consulting firm Cambridge Analytica harvested Facebook data to generate targeted political ads during the 2016 election season.
The award will serve as a warning to tech companies that New Mexico will hold them accountable, state Attorney General Raúl Torrez said at a news conference.
“This judgment should be a signal, an unambiguous message, to Silicon Valley,” he said.
Meta said the ruling and Torrez’s office’s approach to enforcement “makes it all but impossible to do business in the state of New Mexico.”
“At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online. We are confident we will prevail on appeal,” C.J. Mahoney, the company’s chief legal officer, said in a statement.
The Menlo Park, California, company has a market value of $1.8 trillion and brought in more than $200 billion in revenue last year. Company shares traded 2% higher after Wednesday’s announcement, and it was scheduled to report its quarterly earnings later in the day.
New Mexico goes it alone
In August, Meta reached a settlement with nearly all states and territories — except New Mexico and Florida — to pay $18 billion and add stronger child-safety measures to its Facebook and Instagram platforms.
The settlement ended a trial over teen social media addiction and resolved a pivotal case years in the making that sought to hold the tech giant accountable for the role its platforms played in undermining children’s mental health. The effort targeted features designed to grab young people’s attention.
New Mexico didn’t join the multistate settlement, choosing to go after the company on its own.
The director of a nonprofit that supports stronger policies toward corporations said $25 billion is “a drop in the bucket for Meta,” but demonstrates people want accountability.
“Right now, they are rolling out Muse, an AI assistant encouraging people to trust it with everything from their bank accounts to their medical information,” added Nidhi Hegde, executive director of the American Economic Liberties Project. “Which is why we need more enforcers with courage and laws with actual teeth to rein them in.”
At the trial, attorneys for the state cited a 2010 Washington Post op-ed in which Facebook CEO Mark Zuckerberg wrote that the company didn’t sell user data.
“You have control over how your information is shared,” Zuckerberg said. “We do not and never will sell any of your information to anyone.”
New Mexico officials sought fines of $35 billion to $40 billion, arguing the company would only change if its stock price were impacted.
Meta’s lawyers, meanwhile, asserted that the state failed to prove the company made misleading statements and that content moderation actually harmed people in New Mexico. They wanted the company to pay $3.4 billion at most and said an award many times larger would be unconstitutional.
Although interest would accrue on the penalty during the appeal process, Meta could succeed in reducing the number of violations for which it is found liable.
The $25 billion award far exceeds a $5 billion fine the Federal Trade Commission levied against Facebook in 2019.
Peter Ormerod, an associate law professor at Villanova University, was surprised by the size of the New Mexico judgment because previous legal settlements over Cambridge Analytica were much lower.
“It comes out to about $12,000 per person in New Mexico,” he said. “It’s quite unlike anything else we’ve seen.”
Under the New Mexico Constitution, fines for violating consumer protection laws go toward education spending. It could take years for the state to get the money while the company appeals.
Company argues that the state failed to prove harm
The trial focused on accusations Facebook deceived users about a breach stemming from a third-party personality quiz that harvested data from roughly 87 million profiles and sold it to Cambridge Analytica. The now-defunct firm’s clients included Donald Trump’s 2016 presidential campaign.
Attorneys for New Mexico argued that the state’s entire population was deceived, and that Facebook allowed misinformation or violent content to proliferate.
Meta’s lawyers argued the state failed to prove people were harmed by deceptive statements. Zuckerberg in a video deposition denied that Facebook profited off harmful content and said the company had to balance free speech with content moderation.
In a partial win for the company, jurors rejected assertions that Facebook made false claims about removing harmful content, including misinformation about the COVID-19 pandemic.
Meta lawyers said it has changed policies since the lawsuit was filed in 2021 and catches and removes an estimated 99% of content violating its standards.
