Meta ordered to pay New Mexico $25 billion over Facebook privacy claims

A judge ordered Meta to pay New Mexico $25 billion on Wednesday, 21 October, following a jury verdict that Facebook deceived the public about privacy and content moderation, the Associated Press reported.

Judge Francis Mathew set the penalty below the $35 billion to $40 billion sought by the state, but well above the maximum $3.4 billion that Meta’s lawyers had argued was appropriate.

The order follows a September verdict finding more than 43 million violations of New Mexico’s consumer protection laws. The case centred on the Cambridge Analytica data scandal and Facebook’s public statements about how it protected users and managed content.

Meta plans to appeal the jury’s verdict, challenging both the basis for counting violations and whether the state demonstrated harm.

How the violations were counted

The state’s case focused on a third-party personality quiz that harvested data from roughly 87 million Facebook profiles. The data was sold to political consultancy Cambridge Analytica to generate targeted advertising. The now-defunct firm’s clients included Donald Trump’s 2016 presidential campaign.

At trial, jurors considered 34 separate instances in which the state alleged Facebook had misled people about privacy and content moderation.

New Mexico’s lawyers argued that the company’s public statements deceived the state’s entire population, rather than only people who used Facebook. Jurors accepted that approach, finding 2.1 million violations on certain counts and bringing the total to more than 43 million.

Meta disputes that interpretation. Its lawyers have argued in subsequent court filings that New Mexico’s consumer protection laws do not apply to residents who were not using the platform at the time.

At an October 1 hearing, Meta lawyer Matt Nicholson said: “The jury didn’t make findings that any New Mexican heard or saw these statements, or was harmed by them.”

Penalty faces an appeal challenge

New Mexico’s lawyers argued that a substantial financial penalty was needed to change the company’s behaviour, seeking an amount large enough to affect its share price.

Meta’s legal team argued that a penalty many times greater than $3.4 billion would violate due process, be unconstitutional and fail on appeal. The company also maintained that the state had not proved that its statements about privacy and content moderation harmed New Mexicans.

The appeal could reduce the number of violations and, consequently, the financial penalty. Interest would accrue on the penalty during an appeal, according to the report.

The jury did not accept every part of the state’s case. It found that New Mexico had not proved Facebook made false claims about removing harmful content, including misinformation about the COVID-19 pandemic.

State lawyers had accused Facebook of favouring certain accounts and allowing violent or inaccurate material to spread. Meta denied those allegations. In a video deposition, chief executive Mark Zuckerberg denied that Facebook profited from harmful content and said the company had to balance freedom of speech with moderation.

New Mexico pursued a separate trial

New Mexico was the only state to take the Cambridge Analytica case to trial after 48 other states agreed an $18 billion settlement in August. Florida also did not sign that agreement, which released Meta from future liability related to the privacy breach.

New Mexico Attorney General Raúl Torrez has said money awarded in the case will go into a fund for the state’s education system. The state is also seeking an injunction to prevent similar practices.

The $25 billion order sets the penalty following the jury’s findings, but Meta’s planned appeal leaves the final financial outcome unresolved.