A New Mexico judge ordered Meta to pay $25 billion on October 21 for misleading Facebook users about how the company handled their data. In particular, Judge Francis Mathew issued the ruling after a jury found more than 43 million violations of the state’s consumer protection law.
The case traces back to the Cambridge Analytica scandal that surfaced in 2018. The British firm collected data from up to 87 million Facebook users through a third-party quiz app. It then used that data to build voter profiles for Donald Trump’s 2016 presidential campaign. Facebook learned about the data transfer in December 2015 but did not tell the public for over two years.
The jury ruled in September that 26 of 29 statements by Meta and its leaders were misleading. According to Judge Mathew, senior leadership, including CEO Mark Zuckerberg and former COO Sheryl Sandberg, pursued a “calculated strategy to mislead consumers.” He also found that Facebook’s promised investigation into the breach was “willfully ineffective.”
Under New Mexico law, each violation carries a fine of up to $5,000, which would have totaled over $219 billion. However, Judge Mathew reduced the amount to $25 billion after considering constitutional limits on excessive fines. The state had asked for $35 to $40 billion, while Meta’s lawyers argued for a cap of $3.45 billion.
All the money must go to New Mexico’s school system. Attorney General Raul Torrez said the state may have “funded school construction for the next 100 years.” He also called the ruling possibly the largest single-state verdict against a company in US history.
Naturally, Meta plans to appeal the ruling. Chief Legal Officer C.J. Mahoney said the ruling makes it “all but impossible to do business in the state of New Mexico.” He also called the lawsuit a “tax on speech” and said the company expects to win on appeal.
This ruling adds to a growing list of penalties Meta faces over its data practices. In 2019, the US Federal Trade Commission fined the company $5 billion over the same scandal. Furthermore, 48 states settled Cambridge Analytica claims with Meta as part of an $18 billion deal in August. However, New Mexico and Florida declined to join that deal.
