Judge Orders Meta to Pay New Mexico $25 Billion Over Facebook Privacy Claims

A New Mexico judge on Wednesday ordered Meta Platforms to pay the state $25 billion after a jury found that the company misled users about privacy on Facebook. State Attorney General Raúl Torrez called it one of the largest state verdicts against a company in American history, and Meta has said it plans to appeal.

By law, the money from consumer protection fines in New Mexico goes to public education, so the penalty is aimed at the state's school system, according to ABC News and CBS News.

What the jury and the judge decided

In September, jurors found Meta liable for more than 43 million violations of New Mexico's consumer protection laws, The Guardian reported. It said jurors concluded on Sept. 25 that 26 of 29 statements by the company and its leadership were misleading. The violations were counted by the number of Facebook users or state residents who were the audience for each statement.

CBS News reported that jurors found Facebook falsely told consumers they controlled how their information was shared, and that it misled them by claiming it did not sell or share personal information with advertisers. In his order, Judge Francis Mathew wrote that the company's “most senior leadership,” including CEO Mark Zuckerberg and former chief operating officer Sheryl Sandberg, made misrepresentations.

The Guardian said Mathew found that state law supported a penalty of more than $219 billion, but he reduced the amount to $25 billion. State law allows up to $5,000 per violation.

The case grew out of a data breach in which a third-party personality quiz collected data from roughly 87 million Facebook profiles. That data went to the political consulting firm Cambridge Analytica, which used it to generate targeted ads. The firm's clients included Donald Trump's 2016 presidential campaign, ABC News reported.

The arguments on each side

New Mexico's lawyers had asked the court for between $35 billion and $40 billion. They argued that only a sum large enough to affect Meta's stock price would change the company's behavior. They also argued that the entire population of the state, not only Facebook users, was deceived by its public statements.

Meta's lawyers argued for a cap of no more than $3.4 billion, according to ABC News and CBS News; The Guardian put the figure at $3.45 billion. They said a much larger award would violate due process, be unconstitutional and fail on appeal. The company also argued that the state did not prove that anyone was actually harmed or that its executives made misleading statements about privacy, and that its content moderation policies are robust.

Meta's chief legal officer, C.J. Mahoney, said in a statement that the company is confident it will “prevail on appeal.” He said the ruling makes it nearly impossible to do business in New Mexico and that the lawsuit seeks to impose a tax on speech.

Torrez said at a news conference that the judgment should send an “unambiguous message” to Silicon Valley. He said the case is about whether corporations can mislead consumers about their personal information without facing meaningful consequences.

What this means for New Mexico residents and schools

If the penalty stands, Torrez said, all of the money will go into a fund for the state's education system. “We may have paid for the construction of schools for the next 100 years,” he said, though he acknowledged that the money would be tied up while Meta appeals, as expected.

An appeal could also change the outcome. ABC News reported that Meta could argue to reduce the number of violations and with it the total penalty, and that interest on the penalty would accrue during the appeal. The state is also seeking an injunction to stop similar practices.

For Facebook users, the case highlights how a state court weighed the company's public statements about privacy. Forty-eight other states settled with Facebook in a nationwide case, and ABC News reported that settlement was for $18 billion in August. New Mexico chose to go to trial on its own.

Meta's other cases in New Mexico

The Guardian said it was the second verdict in six months from a Santa Fe jury in a lawsuit brought by the state against Meta. In the first trial, which ended in March, jurors found the company misled users about the safety of young people on Facebook, Instagram and WhatsApp and ordered $375 million in civil penalties. A judge later directed Meta to pay $567 million into a state fund for teen mental health.

Around Prague, based on reporting by ABC News, CBS News, The Guardian