Meta ordered to pay record $25bn over New Mexico privacy case

Meta has been ordered to pay New Mexico $25 billion after a jury found that Facebook deceived users about the privacy and handling of their personal data, in what BBC News and ABC News Australia describe as the largest penalty imposed on the company. Judge Francis Mathew wrote that Facebook’s deception was intentional and that executives repeatedly misled the public. In his ruling, he said the company had promised users control over their data when that promise was false.

The judge said the alleged misrepresentations lasted more than 11 years, from 2010 to 2021. The case centred on the Cambridge Analytica scandal, in which a third-party personality quiz collected information from about 87 million Facebook profiles. New Mexico lawyers argued that Facebook had made broad assurances that users’ data would not be shared or accessed without permission, despite evidence that third parties had obtained it.

A jury found Meta liable for more than 40 million violations of New Mexico consumer-protection laws. ABC News Australia reported a figure exceeding 43 million violations. The judge said the full calculation of penalties reached $219 billion before he reduced the award to $25 billion.

State Attorney-General Raúl Torrez said the judgment should warn technology companies that New Mexico would enforce its laws. He argued that companies could not use their size and influence to place themselves beyond legal accountability. Under New Mexico’s constitution, fines from consumer-protection violations are directed towards education, although an appeal could delay any payment for years.

Meta rejected the findings and said the enforcement approach made it nearly impossible to do business in the state. Chief legal officer CJ Mahoney argued that the case sought to impose a tax on speech through rules governing what people could say online. He said the company was confident it would prevail on appeal.

The size of the award far exceeds the $5 billion penalty imposed on Facebook by the Federal Trade Commission in 2019. New Mexico’s lawyers had sought between $35 billion and $40 billion, while Meta argued that anything above $3.4 billion would be unconstitutional and violate due process. The judgment comes as Meta faces other legal disputes.

The company agreed in August to an $18 billion settlement with nearly all US states and territories over claims involving child safety on Facebook and Instagram; New Mexico and Florida did not join that agreement. At the same time, Meta reported quarterly revenue of about $64.5 billion to $64.6 billion, ahead of Wall Street expectations. The company says the New Mexico ruling remains subject to appeal and may ultimately be reduced.