A judge in New Mexico ordered Meta Platforms to pay $25 billion on Wednesday after a jury found the company had misled consumers in a case arising from allegations that a political consulting firm involved in Donald Trump’s 2016 presidential campaign obtained data from millions of Facebook users without their consent.
New Mexico Attorney General Raúl Torrez said it was one of the largest, if not the largest, single state verdict against the company in American history.
“Facebook’s wrongdoing — over the course of years and systematically broadcast to the public — goes to the heart of Facebook’s core business practices,” state District Judge Francis Mathew wrote in his order.
The Penalty
Mathew found that a penalty of more than $219 billion was warranted based on state law, but he reduced the figure to $25 billion. A Meta spokesperson did not immediately respond to a request for comment. The company had previously said a penalty in the billions of dollars risked violating its constitutional rights to due process and protection from excessive fines.
The penalty is the largest levied against the tech giant in the wake of the Cambridge Analytica scandal. In 2019, the company was hit with a $5 billion penalty by the US Federal Trade Commission stemming from the same scandal
The Lawsuit
New Mexico’s attorney general sued Meta in 2021 following revelations that Cambridge Analytica had harvested personal data from as many as 87 million Facebook users through a third-party app. The state accused Meta of lying to Facebook users about who had access to their data, how the company handles hate speech and misinformation, and other internal policies.
Jurors on September 25 found that 26 of 29 statements made by the company and its leadership on those issues were misleading. They said the company had committed more than 43 million violations of New Mexico’s consumer protection laws.
“It has been a long time coming holding Big Tech accountable,” Torrez told a press conference in Albuquerque. “I think today’s judgment is a clear break with that past and a very clear warning to those in this space and beyond that we intend to protect our people and protect our consumers.”
The Appeal
Legal experts and financial analysts said the penalty was likely to face a lengthy battle on appeal. Analyst Gil Luria, head of technology research at D.A. Davidson & Co., called the ruling costly but unlikely to affect the company’s value. “Meta is worth nearly $2 trillion and will likely continue to appeal these cases and drag them out,” Luria said.
In court filings, Meta urged Mathew to cap the penalties at $3.45 billion, saying a higher penalty ran the risk of scaring businesses out of the state. The company said the evidence showed Meta does not sell user data and New Mexico did not prove that any consumer had actually been deceived.
The Second Verdict
The verdict was the second in six months by a Santa Fe jury in a lawsuit brought by New Mexico against Meta. In the first trial, which ended in March, a jury found Meta misled users about young users’ safety on its platforms and ordered the company to pay $375 million in civil penalties. A judge later directed the company to pay $567 million into a New Mexico fund for teen mental health.
The Bottom Line
A New Mexico judge has ordered Meta to pay $25 billion after a jury found the company misled users about data privacy in the Cambridge Analytica scandal. It is one of the largest state verdicts against the tech giant in US history. Meta is expected to appeal. The ruling follows a separate $375 million verdict in New Mexico over teen safety on Meta’s platforms.
My Opinion
Twenty-five billion dollars sounds like a lot. For Meta, it is a rounding error. The company is worth nearly $2 trillion. It made more than $1 billion from crypto ventures in a single year. A $25 billion fine is not a deterrent. It is a cost of doing business.
But the number matters less than the principle. A jury found that Meta lied to its users — 26 out of 29 statements about data privacy were misleading. The company committed more than 43 million violations of New Mexico’s consumer protection laws.
The Cambridge Analytica scandal happened nearly a decade ago. It took this long for a single state to hold Meta accountable. And Meta will appeal. It will drag this out for years, pay its lawyers millions and eventually, it will settle for a fraction of the judgment or win on a technicality.
