Meta must pay New Mexico $25 billion after a jury finds Facebook misled users about data privacy, marking its biggest penalty ever.
A judge has ordered Meta to pay $25 billion to New Mexico after a jury found the technology company liable for misleading Facebook users about their privacy, in what is the biggest penalty ever imposed on the company.
State District Court Judge Francis J. Mathew ruled on Wednesday that Facebook deliberately deceived users, with executives repeatedly misleading the public about how the platform handled personal information.
“Facebook promised users that they (the users) controlled their data. This was false,” he said.
In September, jurors found Meta liable for more than 43 million violations of New Mexico’s consumer protection laws over misleading public statements about its handling of users’ personal data.
The case followed revelations that political consulting firm Cambridge Analytica harvested Facebook users’ data to develop targeted political advertisements during the 2016 US presidential election.
New Mexico Attorney General Raúl Torrez said the penalty would send a strong message to technology companies that the state would hold them accountable for their actions.
“This judgment should be a signal, an unambiguous message, to Silicon Valley,” he said at a news conference.
Meta rejected the ruling, arguing that the state’s approach to enforcement threatened its ability to operate in New Mexico.
The company 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, Meta’s chief legal officer, said in a statement.
The company, headquartered in Menlo Park, California, has a market value of $1.8 trillion and generated more than $200 billion in revenue last year.
Its shares rose 2 per cent following Wednesday’s announcement, ahead of its scheduled quarterly earnings report later in the day.
In August, Meta reached a settlement with nearly all US states and territories, excluding New Mexico and Florida, agreeing to pay $18 billion and introduce stronger child-safety measures on Facebook and Instagram.
The settlement ended a trial over allegations of teenage social media addiction and addressed claims that the company’s platforms used features designed to capture young people’s attention at the expense of their mental health.
New Mexico declined to join the multistate settlement and pursued its case independently.
Nidhi Hegde, executive director of the American Economic Liberties Project, a nonprofit advocating stronger corporate accountability policies, described the $25 billion penalty as “a drop in the bucket for Meta” but said it showed that people wanted 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,” Hegde said.
“Which is why we need more enforcers with courage and laws with actual teeth to rein them in.”
During the trial, state attorneys cited a 2010 Washington Post opinion article in which Meta chief executive Mark Zuckerberg said the company would not sell users’ personal information.
“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 had sought penalties of between $35 billion and $40 billion, arguing that the company would only change its practices if the financial consequences affected its share price.
Meta’s lawyers argued that the state had failed to prove the company made misleading statements or that its content moderation practices harmed residents.
They said the penalty should not exceed $3.4 billion, warning that a significantly larger award would be unconstitutional.
Interest will accrue on the penalty while Meta appeals the judgment. However, the company could still succeed in reducing the number of violations for which it was held liable.
The $25 billion award far exceeds the $5 billion fine imposed on Facebook by the Federal Trade Commission in 2019.
Peter Ormerod, an associate law professor at Villanova University, said he was surprised by the size of the judgment, given that previous legal settlements involving Cambridge Analytica had been substantially 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 consumer protection violations go towards education spending. However, the state could wait years to receive the money while the company pursues its appeal.
The trial focused on allegations that Facebook misled users about a data breach involving a third-party personality quiz that harvested information from about 87 million profiles and sold it to Cambridge Analytica.
The now-defunct consultancy worked with clients that included Donald Trump’s 2016 presidential campaign.
New Mexico’s attorneys argued that Facebook’s conduct deceived the state’s entire population and that the platform allowed misinformation and violent content to spread.
Meta’s lawyers maintained that the state had not demonstrated that users suffered harm as a result of the company’s statements.
In a video deposition, Zuckerberg denied that Facebook profited from harmful content and said the company had to balance freedom of speech with content moderation.
Jurors partly sided with Meta, rejecting claims that Facebook made false statements about removing harmful content, including misinformation about the COVID-19 pandemic.
Meta’s lawyers also argued that the company had changed its policies since the lawsuit was filed in 2021 and now detects and removes an estimated 99 per cent of content that violates its standards.
