Meta Fine: New Mexico judge orders Facebook owner to pay $25 billion

Meta Fine proceedings in New Mexico have resulted in a $25 billion penalty against Meta Platforms after a jury found that the company misled consumers in a case linked to the Cambridge Analytica data scandal.

Judge Francis Mathew issued the order on Wednesday following a jury verdict in a lawsuit brought by New Mexico Attorney General Raúl Torrez. The case centred on allegations that a political consulting firm involved in Donald Trump’s 2016 presidential campaign obtained personal information from millions of Facebook users without their consent.

Torrez described the decision as one of the largest single-state verdicts against a company in American history. The judge said the company’s conduct over several years went to the heart of its business practices.

Mathew found that state law could support penalties exceeding $219 billion but reduced the amount to $25 billion.

Meta said it was confident it would overturn the ruling on appeal. The company’s chief legal officer, C.J. Mahoney, argued that the decision and the state’s approach to enforcement could make it extremely difficult for businesses to operate in New Mexico.

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Mahoney also described the lawsuit as an attempt to impose restrictions on online speech. Meta had previously argued that penalties running into billions of dollars could violate its constitutional rights to due process and protection against excessive fines.

The penalty is the largest imposed on Meta in connection with the Cambridge Analytica scandal. In 2019, the company agreed to pay a $5 billion penalty to the US Federal Trade Commission over the same controversy.

New Mexico filed its lawsuit in 2021 after revelations that Cambridge Analytica had obtained personal information from as many as 87 million Facebook users through a third-party application.

The state accused Meta of misleading users about who could access their data, its handling of hate speech and misinformation, and other company policies. Prosecutors alleged that Meta knew third parties had broad access to personal information and tolerated harmful content when doing so benefited its business.

Cambridge Analytica, which has since closed, worked for Trump’s successful 2016 presidential campaign. It obtained information from millions of Facebook accounts through a researcher who had been permitted to operate an application on the platform. The data was used for voter profiling and targeted political messaging.

Torrez said the ruling marked an important step towards holding major technology companies accountable and protecting consumers.

The penalty followed a September 25 jury verdict that found 26 of 29 statements made by Meta and its leadership on the issues were misleading. Jurors concluded that the company had committed more than 43 million violations of New Mexico’s consumer protection laws.

State law permits penalties of up to $5,000 per violation, with the money directed to New Mexico’s school system. The scale of the potential penalties became a central issue during hearings over the final amount.

The state’s lawyers had asked the judge to impose between $35 billion and $40 billion, arguing that such a penalty was justified by the evidence and constitutional protections. Meta urged the court to limit the amount to $3.45 billion, saying a larger award could discourage businesses from operating in the state.

The company also argued that it did not sell users’ personal data and that the state had not demonstrated that consumers were actually misled.

Legal experts and financial analysts expect Meta to challenge the ruling through a lengthy appeals process. D.A. Davidson technology analyst Gil Luria said the penalty was substantial but was unlikely to significantly affect the company’s overall valuation.

Daryl Lim, an associate dean at Penn State Dickinson Law, said constitutional protections against excessive fines did not automatically mean the penalty would be overturned, given the way New Mexico’s law is written.

The ruling is the second major courtroom defeat for Meta in New Mexico in six months. In a separate trial that ended in March, a Santa Fe jury found that the company had misled users about the safety of young people on Facebook, Instagram and WhatsApp, awarding the state $375 million in civil penalties.

After a second phase of that case, a judge directed Meta to pay an additional $567 million into a state fund for teen mental health and ordered the company to introduce measures to protect teenage Facebook and Instagram users in New Mexico.