New Mexico judge orders Meta to pay $25 billion over misleading privacy statements

A New Mexico judge on Wednesday ordered Meta Platforms to pay the state $25 billion in civil penalties for misleading Facebook users about their privacy, according to the Albuquerque Journal. The order, issued by Santa Fe District Judge Mathew, follows a September jury verdict that the company committed 43.9 million violations of the state’s Unfair Practices Act.

Attorney General Raúl Torrez called the order “one of the largest financial penalties against a corporation in U.S. history,” the Journal reported. He described it as a “historic day” for New Mexico and for consumers nationwide.

The case stems from a 2021 lawsuit filed by then-Attorney General Hector Balderas and is tied to the Cambridge Analytica scandal, the Journal reported. Jurors weighed 29 public statements by the company and found that 26 were false or deceptive. According to the Journal, they concerned the removal of hate speech and misinformation and users’ ability to control whether third parties could use their personal data.

In a 20-page opinion, Mathew wrote that the violations ran from 2010 to August 2021 and appeared in earnings calls, national television interviews and press conferences, Courthouse News reported. He cited representations by chief executive Mark Zuckerberg and then-chief operating officer Sheryl Sandberg and called the statements “part of a coherent strategy designed to mislead the public,” the Journal reported.

“The harm in this matter is difficult to overstate and goes to the heart of Facebook’s basic business proposition,” Mathew wrote, according to Courthouse News. He also described “a systemic pattern of deception at the core of Facebook’s business model.”

The state’s law allows a penalty of up to $5,000 per violation. Under the jury instructions, each statement was counted against nearly 1.4 million New Mexico users, the Journal reported. Courthouse News reported that the jury’s figure came to about $219 billion, and that the judge found the trial record supported the maximum penalty before reducing the amount to $25 billion. The outlet reported that he did not explain how he calculated the reduction.

Courthouse News reported that after the Cambridge Analytica revelations, Facebook promised to investigate advertisers’ misuse of data and ban offenders. According to the opinion as the outlet described it, the company knew thousands of apps “exhibited suspicious activity” yet conducted only 14 audits and did not notify users of data misuse.

At an October 1 hearing, Meta attorney Matt Nichols asked the judge for an 80 percent discount, Courthouse News reported. He called the $219 billion figure “astronomical and unconstitutional” and pointed to the company’s 2019 settlement with the Federal Trade Commission, which was $5 billion.

Meta’s chief legal officer, C.J. Mahoney, said in a statement that the lawsuit “seeks to impose a tax on speech,” the Journal reported. He said the ruling and the attorney general’s approach make it “all but impossible to do business in the state of New Mexico.” Mahoney said Meta is confident it will win on appeal.

The penalty is the third financial judgment against the company in New Mexico this year. In March, a Santa Fe jury ordered Meta to pay $375 million in a separate child safety case brought by Torrez against the company and Zuckerberg, the Journal reported. On August 6, Judge Bryan Biedscheid ordered Meta to pay another $567 million in that case to help repair harm caused by its platforms.

The Journal’s account did not say how the $25 billion would be used if the judgment survives appeal.

Courthouse News reported that New Mexico’s population was used as the basis for counting violations tied to statements in major news outlets, at 2.1 million per statement. Statements made through the company’s own channels were counted against the estimated number of New Mexicans with Facebook accounts in 2020.

The jury’s figure would exceed the $206 billion Tobacco Master Settlement Agreement of 1998, Courthouse News reported.