A judge in New Mexico has ordered Meta Platforms to pay $25 billion after a jury found that the company misled consumers about the privacy of their personal data, marking one of the largest financial penalties imposed on a corporation in United States history.
The ruling stems from a lawsuit filed by New Mexico accusing Meta of misleading Facebook users about who could access their personal information. The case followed allegations that Cambridge Analytica, a now-defunct British political consulting firm involved in Donald Trump’s 2016 presidential campaign, obtained data from millions of Facebook users without their consent.
In his order, issued more than three weeks after the verdict, Judge Francis Mathew said Facebook’s alleged misconduct had continued for years and involved public representations central to the company’s business practices.
Mathew determined that state law could support a penalty exceeding $219 billion but reduced the amount to $25 billion.
Meta Says It Will Appeal the Ruling
Meta’s chief legal officer, C.J. Mahoney, said the company was confident it would prevail on appeal.
“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,” Mahoney said.
He argued that the lawsuit sought to impose a tax on speech by enforcing new rules governing what people could say online.
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New Mexico Attorney General Raúl Torrez described the penalty as one of the largest financial sanctions against a corporation in US history.
“It has been a long time coming holding Big Tech accountable,” Torrez said at a press conference in Albuquerque. He added that the judgment sent a warning to technology companies and others that the state intended to protect consumers.
Cambridge Analytica Scandal at the Centre of the Case
New Mexico’s attorney general filed the lawsuit in 2021 after revelations that Cambridge Analytica had harvested personal information from as many as 87 million Facebook users through a third-party application.
The state accused Meta of misleading users about who could access their data and how the company handled hate speech and misinformation on its platforms.
Prosecutors also alleged that Meta knew third parties had broad access to users’ information and tolerated harmful content when it served the company’s financial interests.
Cambridge Analytica used the data for voter profiling and political targeting.
Meta previously paid a $5 billion penalty to the US Federal Trade Commission in 2019 over the Cambridge Analytica scandal.
Six other states also settled lawsuits against Meta related to Cambridge Analytica for a combined $459.2 million. Those settlements formed part of a $17.1 billion multistate agreement reached in August to resolve claims that the company’s platforms had harmed teenagers’ mental health.
Jury Found More Than 43 Million Potential Violations
In September, jurors found that Meta and its leadership had made 26 misleading statements concerning data privacy, hate speech and other issues.
By multiplying those statements by their potential audience, the jury determined that the company had committed more than 43 million violations of New Mexico’s consumer protection laws.
During an October 1 hearing, Randi McGinn, a lawyer representing New Mexico, asked the judge to impose a penalty of between $35 billion and $40 billion.
McGinn argued that a substantial financial penalty was necessary to hold the company accountable.
Meta, however, urged the court to limit the penalties to $3.45 billion. In court filings, the company argued that it did not sell users’ personal data and that New Mexico had failed to prove any consumer was actually misled.
Further Legal Challenges Ahead
The ruling comes as Meta faces thousands of lawsuits and growing pressure from lawmakers over the effects of Instagram and Facebook on teenagers’ mental health. Another trial related to these issues is scheduled to begin next week.
Earlier this year, New Mexico secured $942 million in two trials involving claims that Meta facilitated the sexual exploitation of young people on Instagram and Facebook and misled consumers about the platforms’ safety.
Despite the size of the latest penalty, technology analyst Gil Luria, head of technology research at D.A. Davidson & Co., said the ruling was unlikely to significantly affect Meta’s valuation.
“Meta is worth nearly two trillion dollars, and will likely continue to appeal these cases and drag them out,” Luria said.
The company’s planned appeal is expected to prolong the legal dispute over its data privacy practices and the scope of state consumer protection laws.
