A judge in New Mexico has ordered Meta Platforms to pay $25 billion after a jury found the company misled consumers, in a case arising from claims that a political consulting firm working for Donald Trump’s 2016 campaign obtained data from millions of Facebook users without their consent, Dawn and Geo News reported, citing Reuters.
New Mexico Attorney General Raúl Torrez said it was one of the largest, if not the largest, single state verdicts against a company in American history.
“The heart of Facebook’s core business”
“Facebook’s wrongdoing, over the course of years and systematically broadcast to the public, goes to the heart of Facebook’s core business practices,” Judge Francis Mathew wrote in his order.
Mathew found that a penalty of more than $219 billion was justified under state law, but reduced it to $25 billion.
On September 25, jurors found that 26 of 29 statements made by the company and its leaders were misleading. They said Meta committed more than 43 million violations of New Mexico’s consumer protection laws, based on the number of Facebook users or residents who heard each misleading statement. State law allows a penalty of up to $5,000 per violation and sends all of the money to New Mexico’s school system, Torrez said.
What New Mexico alleged
The state sued Meta in 2021 after it emerged that Cambridge Analytica had harvested personal data from as many as 87 million Facebook users through a third-party app. The firm, now defunct, got the data without users’ consent from a researcher whom Facebook had allowed to run an app on its network, and used it for voter profiling and targeting.
New Mexico accused Meta of lying to its users about who could access their data, how it handled hate speech and misinformation, and other internal policies. It said the company knew third parties had broad access to personal data and tolerated harmful content when it helped its bottom line.
Meta: “a tax on speech”
Meta’s chief legal officer, CJ Mahoney, said the company was confident it would win 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,” he said. “At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online.”
Meta had asked the judge to cap the penalty at $3.45 billion, arguing that a bigger sum would scare businesses away from the state, that it does not sell user data, and that the state had not proved any consumer was actually misled. New Mexico’s lawyer Randi McGinn had asked for $35 billion to $40 billion. “This court should speak to Meta in the only language it understands, which is money,” she said.
How big is $25 billion?
- It is the largest penalty against Meta over Cambridge Analytica. In 2019, the US Federal Trade Commission fined the company $5 billion over the same scandal.
- Six other states settled their Cambridge Analytica claims for $459.2 million as part of a $17.1 billion multistate settlement in August over harm to teenagers’ mental health.
- Analyst Gil Luria of DA Davidson said the ruling was costly but unlikely to hurt the value of a company “worth nearly two trillion dollars”, which would likely “drag out” appeals.
“It has been a long time coming holding Big Tech accountable,” Torrez told reporters in Albuquerque. Legal experts expect a long appeals battle.
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