Meta Ordered to Pay New Mexico $25 Billion in Deceptive Privacy Case

A judge has ordered Meta, the parent company of Facebook, to pay New Mexico $25 billion following a jury's finding that the company deceived users about its privacy and content moderation practices. The penalty, issued by Judge Francis Mathew, was described by New Mexico Attorney General Raúl Torrez as potentially "the single largest state verdict against a company in American history."

Torrez stated that the judgment serves as an "unambiguous message" to Silicon Valley, emphasizing that New Mexico will continue to hold tech companies accountable. Under the state's constitution, funds collected from consumer protection law violations are allocated to education spending. Torrez suggested that the award could potentially fund school construction for a century, though he acknowledged that the funds might be held up if Meta pursues an expected appeal.

Meta, which has indicated plans to appeal the September verdict, did not immediately respond to a request for comment. The company's shares saw a slight increase of 2% following the announcement of the penalty.

The jury's September verdict found Meta liable for over 43 million violations of New Mexico's consumer protection laws. These violations stemmed from a political consulting firm, Cambridge Analytica, which harvested Facebook user data to create targeted political advertisements for the 2016 election. While 48 other states settled with Facebook in a nationwide case, New Mexico opted to pursue its own trial.

Attorneys for New Mexico had initially sought between $35 billion and $40 billion, arguing that only a sum impacting the company's stock price would prompt meaningful change. Meta's legal team countered by suggesting a payment of no more than $3.4 billion, asserting that a larger award would be unconstitutional and violate due process. They also argued that the state failed to prove misleading statements about privacy or that content moderation had harmed New Mexicans.

During the trial, New Mexico's case focused on accusations that Facebook had misled users about a data breach initiated by a third-party personality quiz. This quiz reportedly harvested data from approximately 87 million profiles, which was then sold to Cambridge Analytica for targeted advertising. The defunct firm's clients included the 2016 presidential campaign of Donald Trump.

State prosecutors contended that Facebook's public statements about privacy deceived the entire population of New Mexico, not just its users. However, Facebook's lawyers argued that the state did not present evidence that individuals were actually harmed by these statements. Jurors ultimately found Meta liable for 2.1 million violations on certain counts, contributing to the total of over 43 million violations.

Meta's attorneys have since argued that the state's consumer protection laws do not apply to New Mexico residents who were not active users of the platform at the time. The state is also seeking an injunction to prevent similar practices in the future.

In one aspect of the trial, jurors found that the state did not prove Facebook made false claims regarding the removal of harmful content, including misinformation about the COVID-19 pandemic. New Mexico prosecutors had argued that the company favored certain accounts and allowed violent or inaccurate content to spread, while Facebook's attorneys denied these allegations, citing robust content moderation policies and the need to balance freedom of speech.

Facebook's legal team also stated that the company has updated its policies since the lawsuit was filed in 2021 and now removes 99% of content that violates its standards. Meta is expected to appeal the jury's verdict and the subsequent penalty.