A judge on Wednesday ordered Meta to pay $25 billion to New Mexico after a jury hearing. found the company responsible for misleading users on privacy on Facebook, marking the largest fine ever imposed on 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 (users) controlled their data. That was false,” he said.
In September, jurors found Meta liable for more than $43 million in 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 prize will serve as warning to tech companies that New Mexico will hold them accountable, State Attorney General, Raúl Torrez said at a press conference.
“This judgment should be a signal, an unambiguous message for Silicon Valley,” he said.
Meta said the decision and Torrez’s office’s approach to enforcement “make it virtually impossible to do business in the state of New Mexico.”
“Essentially, this lawsuit seeks to impose a tax on speech to enforce new rules on what people can say online. We are confident we will prevail on appeal,” CJ Mahoney, the company’s general counsel, said in a statement.
Shares of the Menlo Park, Calif., company were trading up 2% immediately after the sanction was announced, and the company was scheduled to report quarterly results later Wednesday.
New Mexico goes it alone
In August, Meta reached an agreement with almost every state and territory – except New Mexico and Florida – to pay $18 billion and add stricter child safety measures to its Facebook and Instagram platforms.
The settlement has ended a trial about adolescence social media addiction and solved a hinged case years in the making that sought to hold the tech giant accountable for the role its platforms play in undermining children’s mental health. The effort was aimed at features designed to attract the attention of young people.
New Mexico did not join the multistate settlement, choosing to go after the company alone.
During the trial, prosecutors cited a 2010 Washington Post op-ed by Facebook CEO Mark Zuckerberg in which he wrote that the company does not sell user data.
“You control how your information is shared,” Zuckerberg said. “We do not and will never sell any of your information to anyone.”
New Mexico lawyers were seeking between $35 billion and $40 billion, arguing that the company would only change its ways with a sum that would affect its stock price.
Meta’s lawyers, meanwhile, argued that the state failed to prove that the company made misleading statements about privacy and that content moderation actually harmed New Mexicans. They argued that the company should pay no more than $3.4 billion, saying a sum ten times that or more would violate due process, was unconstitutional and would not hold up on appeal.
Even if 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 reward far exceeds the fine of 5 billion dollars that the Federal Trade Commission imposed on Facebook in 2019.
Peter Ormerod, an associate professor of law at Villanova University, was surprised by the magnitude of New Mexico’s ruling because previous legal settlements regarding Cambridge Analytica were far inferior.
“That comes out to about $12,000 per person in New Mexico, and that’s just a very high number. It’s unlike anything else we’ve seen,” Ormerod said.
Under the New Mexico Constitution, fines for violating consumer protection laws go toward public education spending. But it could take years before the state receives any of the money while the company appeals.
Company says state failed to prove harm
The state’s case focused on accusations that Facebook misled users about a breach stemming from a third-party personality quiz that collected data from about 87 million profiles and sold it to Cambridge Analytica. Among the now-defunct company’s clients was Donald Trump’s 2016 presidential campaign.
New Mexico lawyers argued that the entire population of the state, not just Facebook users, was deceived by the company. They also said Facebook allowed misinformation or violent content to proliferate.
Meta’s lawyers have vehemently denied the allegations, saying the company’s content moderation policies are robust and that free speech must be considered. They argued that the state failed to prove that misleading statements harmed people.
In one of the tech giant’s rare victories, jurors found that the state failed to prove that Facebook made false statements about removing harmful content, including misinformation about the COVID-19 pandemic.
In a video deposition, Zuckerberg denied the state’s claims that Facebook was profiting from harmful content. He said the company had to balance free speech and content moderation.
The company’s lawyers said it has changed its policies since the lawsuit was filed in 2021 and that it captures and removes about 99% of content that violates its standards.
___
This story has been updated to correct the spelling of the judge’s last name.
___
Associated Press reporter Matthew Brown and technology writer Barbara Ortutay contributed to this report. Schuettler is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to cover under-reported issues.
Gn bussni
