A New Mexico jury said Friday that Facebook was responsible for misleading users about privacy on the platform, in the latest legal setback against the social media giant that has already cost it billions of dollars.
The jury found more than 43 million violations of the nation’s consumer protection law and now it’s up to the judge to determine how much the company would pay, with lawyers representing the state seeking a maximum fine of $5,000 per violation.
“The verdict marks a significant victory for New Mexico consumers and holds one of the world’s largest technology companies accountable for its conduct,” the New Mexico Department of Justice said in a statement.
The two-week trial in Santa Fe centered on accusations that Meta-owned Facebook misled users about a data breach stemming from a third-party personality quiz that collected data from about 87 million profiles and sold it to a political consulting firm, Cambridge Analytica, to generate targeted ads. The now-defunct company’s clients included the 2016 campaign for Donald Trump.
Jurors sided with prosecutors, finding that Facebook made misleading statements about protecting user data that affected New Mexico’s entire population of more than two million residents. The jury also found that Facebook misled the public about investigations into third-party app developers harvesting user data following the Cambridge Analytica scandal.
Facebook says state evidence was ‘outdated’
“We disagree with the verdict and will continue to defend ourselves against attempts to misrepresent our record,” Meta spokesperson Alex Burgos said in an email.
During closing arguments, Facebook’s lawyers argued that the state’s evidence was outdated and that despite five years of gathering information, New Mexico had found only one other case of a data breach.
In one of the defense’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.
The state claimed the company favored certain accounts and allowed the proliferation of violent or inaccurate content. During closing arguments, Randi McGinn, an attorney representing the state, argued that Facebook profits from harmful content.
Facebook has denied the allegations, arguing that the company has adapted its policies since the state’s complaint was filed in 2021 and that it removes 99% of content that violates the standards. In testimony to jurors, CEO Mark Zuckerberg said the company has robust systems for determining whether content should be removed.
“Meta’s platforms are forums for free expression. We have the First Amendment right to operate these platforms in the way we believe best serves the interests of our community. That means prioritizing free speech, protecting our users’ information, and giving them control over their data,” Burgos said in a statement after the verdict.
Expert says impact on business remains uncertain
Although jurors found millions of violations, it’s unclear how much impact the case will have on the company’s bottom line, given Meta’s profitability.
“It’s unlikely that this will actually penalize the company in any significant way,” said Peter Ormerod, an associate professor of law at Villanova University.
Ormerod said the social media company had very high margins and had previously skirted regulatory measures on its platforms.
If the state succeeds in persuading the judge to impose the maximum civil penalties for each violation, the company could owe more than $200 billion, with accrued interest if it decides to appeal. The judge will have to weigh the complex arguments of both sides regarding fair sanctions. In a previous case, New Mexico obtained $942 million thanks to the platform’s policies aimed at protecting minors.
Ormerod praised the state’s “fierce prosecution” of the social media giant, but isn’t sure the ruling will be significant enough to change Meta’s ways.
“There has been a lot of criticism that none of this money is enough to discipline the company,” Ormerod said.
The judge will decide on sanctions at a later date
The judge will decide on sanctions at a hearing on October 1. Attorney General Raúl Torrez told reporters after the verdict that all the money awarded would go to a fund for the state’s education system. The state is also seeking an injunction to stop similar practices in the future.
Friday’s verdict follows several other verdicts against Meta recently.
In August, Meta agreed to pay up to $18 billion to settle a multistate lawsuit involving child safety issues. Buried in the 130-page settlement was an agreement to release Meta from any future liability related to Cambridge Analytica’s privacy violation, making New Mexico the only state to decide to pursue a case on its own. Florida was the only other state that did not sign the settlement, saying it was not tough enough on Meta, leaving the door open for future litigation.
Also this year, New Mexico won judgments totaling $942 million from Meta in a two-phase trial over the company’s safety protections for minors. The court ordered Meta to implement new safeguards, including age verification technology and time limits on its platforms.
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