Meta ordered to pay New Mexico $25 billion for deceiving users about privacy on Facebook

A judge on Wednesday ordered Meta to pay New Mexico US$25 billion after a jury found the company liable for deceiving users about privacy, in what marks the largest fine ever against the owner of Facebook.

The verdict should be seen as a warning for tech companies that New Mexico will hold them accountable, State Attorney General Raúl Torrez said at a news conference.

“This judgement should be a signal, an unambiguous message, to Silicon Valley,” Torrez said.

Under the New Mexico Constitution, fines for violations of consumer protection laws go toward state education spending.

“We may have paid for the construction of schools for the next 100 years,” said Torrez, who acknowledged that the money would be tied up as Meta appeals.

Representatives for Meta, which previously said it plans to appeal the September verdict, didn’t immediately respond to a message seeking comment about the amount.

The Menlo Park, California-based company was scheduled to report its quarterly earnings Wednesday afternoon and its shares were trading 2% higher following the penalty announcement.

In August, Meta reached a settlement with nearly all states and territories -except New Mexico and Florida - to pay $18 billion and add stronger child-safety measures to its Facebook and Instagram platforms.

The settlement ended a trial over teen social media addiction and resolved a pivotal case years in the making that sought to hold the tech giant accountable for the role its platforms played in undermining children’s mental health.

The effort targeted features designed to grab young people’s attention.

New Mexico wasn’t part of the multistate settlement because it was pursuing its own case.

Jurors in September found Meta liable for over 43 million violations of New Mexico consumer protection laws when a political consulting firm, Cambridge Analytica, harvested Facebook user data to generate targeted political ads for the 2016 election.

“Facebook promised users that they (the users) controlled their data. This was false,” Judge Francis J. Matthew wrote in his judgement.

Attorneys for New Mexico had sought $35 billion to $40 billion, arguing that the company would only change its ways with a sum that affected its stock price.

Lawyers for Meta argued for paying no more than $3.4 billion. An award 10 times that or even more would violate due process, was unconstitutional and would not hold up under appeal, they said.

Meta argued the state failed to prove misleading statements about privacy and that content moderation actually harmed New Mexicans. Interest on the penalty would accrue during an appeal, but the number of violations Meta is charged with could be reduced.

Meta attorney Matt Nicholson argued in court that a sum as high as $40 billion would be “shocking to the conscience,” while an attorney for New Mexico, Randi McGinn, urged standing up to “tech titans who think they are bulletproof and can do whatever they want.”

The fine in the case far exceeds the $5 billion fine that the Federal Trade Commission levied against Facebook in 2019.

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