A judge in New Mexico ordered Meta Platforms to pay $25 billion on Wednesday, October 21, after a jury found the company had misled consumers about its data privacy practices in a case rooted in the Cambridge Analytica scandal. Judge Francis Mathew of the First Judicial District Court in Santa Fe issued the order following the jury’s verdict, in what New Mexico Attorney General Raúl Torrez called one of the largest, if not the largest, single state verdict against a company in American history.
The judgment is the final penalty phase of a lawsuit Torrez filed in 2021. Jurors decided the liability question on September 25, and the judge’s order now sets the price: $25 billion, payable to the state, in a case where the law would have supported a figure more than eight times higher.
How 43 Million Violations Became A $25 Billion Bill
The jury found that 26 of 29 statements made by Meta and its leadership were misleading, covering who had access to user data, how the company handles hate speech and misinformation, and other internal policies. Jurors counted more than 43 million violations of New Mexico’s consumer protection law, based on the number of residents who were the audience for each misleading statement.
State law allows a penalty of up to $5,000 per violation. Mathew calculated that a penalty of more than $219 billion was warranted on that basis, then reduced the figure to $25 billion in his order. “Facebook’s wrongdoing — over the course of years and systematically broadcast to the public — goes to the heart of Facebook’s core business practices,” the judge wrote.
The two sides had argued far apart numbers at an October 1 hearing. Randi McGinn, a lawyer for New Mexico, asked for between $35 billion and $40 billion, telling the court it should “speak to Meta in the only language it understands, which is money.” Meta urged Mathew to cap the penalties at $3.45 billion, arguing a higher figure risked scaring businesses out of the state, that Meta does not sell user data, and that New Mexico had not proved any consumer was actually misled.
A Case Built On Cambridge Analytica And Content Policies
The state’s case grew out of revelations that Cambridge Analytica, the British political consulting firm that worked for Donald Trump’s 2016 presidential campaign, harvested personal data from as many as 87 million Facebook users through a third-party app. Torrez sued in 2021, accusing Meta of lying to New Mexico users about who could access their data. The state said Meta knew third parties had broad access to users’ personal data, and that it tolerated hate speech and other harmful content when doing so benefited the company’s bottom line — allegations about public statements that the jury judged, statement by statement.
New Mexico pursued its case alone. Six other states settled their Cambridge Analytica lawsuits with Meta for $459.2 million as part of a $17.1 billion multistate settlement the company reached in August over claims its platforms harmed teen mental health, Reuters reported. The verdict was also the second in six months by a Santa Fe jury in a state lawsuit against Meta: in March, a jury in a separate case found Meta misled users about young people’s safety and ordered $375 million in civil penalties, after which a judge directed a further $567 million into a state teen mental health fund.
Meta Says It Will Appeal, And The Money Is Earmarked For Schools
Meta has said it will appeal. Its chief legal officer, C.J. Mahoney, told USA Today the ruling “makes it all but impossible to do business in the state of New Mexico,” calling the lawsuit an attempt “to impose a tax on speech,” and said the company is confident it will prevail on appeal.
Under New Mexico law, penalties in consumer protection cases go to the state’s school system. “We may have paid for the construction of schools for the next 100 years,” Torrez told reporters, framing the judgment as a warning beyond one company: “For too long, powerful technology companies have operated as though their size and influence put them beyond the reach of the law.” The appeal means the $25 billion is unlikely to be paid soon, and the figure could change substantially before any money moves.
Why It Matters
The $25 billion judgment matters because it prices a decade of privacy statements, not a single data breach. A state jury and judge produced a penalty five times the $5 billion the Federal Trade Commission imposed on Facebook in 2019 — against a company simultaneously fighting a torrenting discovery order in its shadow-library copyright case and a California suit over its AI glasses allegedly recording conversations. For Meta, the exposure is now a stack of state-level verdicts rather than one federal settlement, each landing while it asks investors to fund an enormous AI build-out. For other platforms, the lesson is jurisdictional: a state that opts out of a multistate settlement stays free to set its own, much larger price.
Background
Cambridge Analytica’s harvesting of Facebook data, revealed in 2018, became the defining privacy scandal of the social media era: it triggered the FTC’s record $5 billion penalty in 2019, congressional hearings, and a wave of state lawsuits, of which New Mexico’s — filed in 2021 and fought through two Santa Fe jury trials — has now produced the largest single-state judgment. Meta, renamed from Facebook in 2021, has settled most state claims while contesting the rest, even as its legal leadership changes, with global affairs chief Joel Kaplan departing after 15 years.
Source: Reuters, TechCrunch
0 Comments