A New Mexico judge on Wednesday ordered Meta Platforms to pay $25 billion in penalties over statements it made to Facebook users about their privacy, a ruling that followed a jury verdict in September.4,7,8
Judge Francis Mathew set the amount. New Mexico was the only state to take its claims against the company to trial, after 48 other states settled. In September, the jury found that Meta had committed 43 million "willful violations" of the New Mexico Unfair Practices Act, according to the verdict as described in the coverage.4,7
Mathew calculated that the state was entitled to $219.5 billion, based on the state's maximum penalty of $5,000 multiplied by 43,899,720 violations. He reduced that figure to $25 billion.4
In his findings, Mathew said Facebook's privacy controls failed to give users meaningful control over their data and that third-party app developers could access user information through the platform's systems. He also found that Mark Zuckerberg knew users did not understand how data privacy works and exploited that, citing a message in which the chief executive had written that users "probably don't understand their current privacy settings or care about who sees their updates."4
The case grew out of the Cambridge Analytica scandal. ABC News reported that a third-party personality quiz harvested data from roughly 87 million Facebook profiles and that the data was sold to the political consulting firm, whose clients included the 2016 campaign of President Donald Trump. Axios put the number of affected users at more than 50 million. The state attorney general's lawsuit was filed in 2021.4,7,8
New Mexico Attorney General Raúl Torrez said the verdict was "one of the largest, if not the single largest state verdict against a company in American history." At a news conference, he said, "This judgement should be a signal, an unambiguous message, to Silicon Valley."7
Under New Mexico law, the money goes to state education spending. Torrez said, "We may have paid for the construction of schools for the next 100 years," and acknowledged that the funds would be tied up if Meta appeals, as it is expected to do.7,8
Meta's chief legal officer, C.J. Mahoney, said in an emailed statement to Axios, "This ruling, and the Attorney General's approach to this enforcement, makes it all but impossible to do business in the state of New Mexico." He added, "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."4
During the damages hearing, New Mexico's lawyer, Randi McGinn, had asked for between $35 billion and $40 billion, telling the court, "This court should speak to Meta in the only language it understands, which is money, and the value of its stock price." Meta's lawyers had argued for no more than $3.4 billion. They said an award ten times that or more would violate due process, would be unconstitutional and would not hold up on appeal. Meta attorney Matt Nicholson called a sum as high as $40 billion "shocking to the conscience."7,8
Meta has argued that the state failed to prove its misleading-statement claims and that the company's content moderation had actually helped New Mexicans. Jurors did find that the state had not proved false claims about removing harmful content, including COVID-19 misinformation. Jurors assessed whether Facebook misled users 34 separate times, and the New York Post reported that 26 of 29 statements on the issues were found misleading. At the October 1 hearing, Nicholson said, "The jury didn't make findings that any New Mexican heard or saw these statements, or was harmed by them."7,8
Interest on the penalty will accrue during the appeal, and the number of violations could be reduced on appeal, according to the coverage. The state is also seeking an injunction to stop similar practices. Meta, based in Menlo Park, California, did not immediately respond to a request for comment on the amount. Its shares were trading 2% higher after the announcement, a day the company was scheduled to report quarterly earnings.7
The penalty comes nearly a decade after the Cambridge Analytica scandal first came to light. In August, the other 48 states agreed to a settlement of $18 billion that included a release of Meta from future liability related to the breach. Florida was the only other state that did not sign that settlement.4,7
Meta has said it plans to appeal, and Mahoney said the company would keep operating in the state. "Meta will continue to build a safe and free platform to connect millions of Americans, grow small businesses, and help the country maintain its competitive edge."4,7
