Meta Ordered to Pay New Mexico $25bn, Reports Say

A Santa Fe jury counted the misleading statements one by one, and on Wednesday a judge put a price on them: $25bn.

First Judicial District Judge Francis Mathew ordered Meta to pay the state of New Mexico $25bn in penalties under its Unfair Practices Act, Source NM and CNBC reported, after a jury found in September that Facebook had misled users about their privacy. CNBC says the penalty was revealed in a court filing, and that interest will accrue at 15% a year until it is paid. The BBC, which puts the sum at £18.6bn, calls it the largest fine to date against Meta.

Meta’s response was not available. Source NM, CNBC and the BBC all said they had asked the company for comment, and none had a reply when they published. New Mexico’s attorney general, Raúl Torrez, said he expects Meta to appeal.

The jury found nearly 44 million violations

The case goes back to the Cambridge Analytica scandal, which, as CNBC notes, centred on allegations that the political consulting firm improperly accessed the data of 87 million Facebook users. Then-attorney general Hector Balderas sued Facebook in 2021, choosing to go alone instead of joining the multistate cases that followed the 2018 revelations, Source NM reported at the time of the verdict.

On 25 September the jury found that Facebook had committed close to 44 million violations of the state law. According to Source NM, it ruled that the company made false or misleading statements about users’ ability to control their data, its efforts against hate speech and misinformation, whether it applied its community standards uniformly, and its promise to investigate thoroughly after Cambridge Analytica. The jury sided with the state on 31 of 34 counts.

The judge’s order is scathing, by the reporters’ accounts. CNBC quotes Mathew as finding that “Facebook did not conduct the comprehensive investigation that it promised”, and that pressure from senior executives to keep costs down was among the reasons its internal inquiry was “willfully ineffective”. The BBC reports that he described communications between senior executives, including Mark Zuckerberg, as “designed to mislead the public”.

The judge cut a $219.5bn penalty to $25bn

Each violation carries a penalty of up to $5,000, which is how the full sum reached $219.5bn, CNBC reports. The state had asked for up to $40bn, according to Source NM. Mathew wrote that “the extraordinary number of willful violations found by the jury, the duration and repetition of the conduct, the breadth of subjects on which violations occurred, the involvement of senior Facebook leadership” and other factors supported the highest level of penalty, but he set the figure at $25bn.

“This is a historic day for New Mexico and for consumers across the country,” Torrez said in a statement. At a news conference he called the judgment “a clear warning to everyone in big tech”, and argued that the reduction from $219.5bn “shouldn’t be mistaken for the larger message”. In September he said the penalty money goes to a fund for New Mexico’s schools and students.

A third courtroom loss for Meta in New Mexico

This is not Meta’s first defeat in a Santa Fe courtroom this year. In March a jury ordered it to pay $375m in a case over the risks its platforms posed to teenagers, and in August a judge ordered it to pay $567m into a fund to address harm to the state’s young people, Source NM and CNBC report. Meta said it disagreed with that ruling and planned to appeal, according to CNBC.

When the privacy verdict came in September, a Meta spokesperson told Source NM: “We disagree with the verdict and will continue to defend ourselves against efforts to distort our record.” The company said it has a First Amendment right to manage its platforms in the way it believes best serves its community.

Torrez now wants the law itself rewritten. He and a state lawmaker plan to revamp the Unfair Practices Act, which caps penalties at $5,000 per violation, in the next legislative session. “The Unfair Practices Act was designed for an era that frankly doesn’t exist anymore,” he told reporters on Wednesday.