A New Mexico judge has ordered Meta Platforms Inc. to pay $25 billion in penalties after a jury found the company liable for deceiving state residents about its privacy practices and content moderation policies on Facebook. The judgment, issued Wednesday by Judge Francis Mathew, marks one of the largest state verdicts against a company in American history, according to New Mexico Attorney General Raúl Torrez.
"This judgment should be a signal, an unambiguous message, to Silicon Valley," Torrez stated at a news conference, emphasizing the state's commitment to holding tech companies accountable. Under the New Mexico Constitution, fines collected for violations of consumer protection laws are allocated to state education spending. Torrez suggested the award could potentially fund school construction for the next century, though he acknowledged that the funds would likely be tied up during Meta's expected appeal.
Meta, which is headquartered in Menlo Park, California, has indicated its intention to appeal the September verdict. Representatives for the company did not immediately respond to a request for comment regarding the penalty amount. The company's stock traded slightly higher following the announcement of the judgment.
Trial Details and New Mexico's Solo Pursuit
In September, jurors determined Meta was liable for more than 43 million violations of New Mexico's consumer protection laws. The case stemmed from allegations that a political consulting firm, Cambridge Analytica, harvested Facebook user data to create targeted political advertisements for the 2016 election cycle. While 48 other states settled with Facebook in a nationwide agreement, New Mexico opted to pursue its case independently.
Attorneys for New Mexico had initially sought between $35 billion and $40 billion, arguing that only a substantial financial penalty would compel the company to change its practices. Conversely, Meta's legal team advocated for a penalty no higher than $3.4 billion, asserting that a significantly larger award would be unconstitutional and unsustainable on appeal.
Meta's defense argued that the state failed to prove that its statements about privacy were misleading or that content moderation policies had actually harmed New Mexico residents. The company's attorneys contended that the state did not demonstrate that any New Mexican specifically heard or saw the alleged misleading statements or suffered harm as a result.
Evidence and Violations
The state's case focused on accusations that Facebook misled users about a data breach involving a third-party personality quiz that compromised the data of approximately 87 million users. This data was subsequently sold to Cambridge Analytica. New Mexico prosecutors argued that Facebook's public statements about privacy deceived the entire population of the state, not just its users.
Jurors found Facebook liable for 2.1 million violations on certain counts, contributing to the total of over 43 million violations. Meta's legal team has contested the state's method of counting violations, arguing that the consumer protection laws should not apply to individuals in New Mexico who were not active users of the platform at the time.
In a partial victory for Meta, jurors did not find sufficient evidence to support the state's claim that Facebook made false statements regarding the removal of harmful content, including misinformation related to the COVID-19 pandemic. The state had argued that the company allowed misinformation and violent content to spread, while Meta's defense maintained that its content moderation policies are robust and balance freedom of speech concerns.
Following the verdict, Torrez announced that all awarded funds would be directed to the state's education system and that the state would seek an injunction to prevent similar practices in the future.