A district judge on Wednesday ordered that Meta pay a record-breaking $25 billion civil penalty to New Mexico for violating the state’s consumer protection law.
The judgment, which Meta plans to appeal, follows an August jury verdict that Facebook, one of Meta’s social media companies, committed 43,899,725 violations of New Mexico’s Unfair Practices Act.
New Mexico Attorney General Raúl Torrez said the judgment demonstrates that violations of the state’s consumer protection statute “carry real consequences.”
People were interested in these podcasts
“We took on one of the largest companies in the world because New Mexicans deserve honesty, accountability, and the protection of their personal information,” he said. “Today’s result makes clear that no corporation is too powerful to be held accountable.”
Meta’s chief legal counsel C.J. Mahoney said the litigation and ruling “makes it all but impossible to do business in the state of New Mexico.”
“At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online,” he said in a statement.
The New Mexico case arose after the 2018 Cambridge Analytica scandal, in which a British political consulting firm harvested personal data from up to 87 million Facebook users without consent to build voter profiles for political campaigns.
The state’s lawsuit cited those privacy violations as part of a broader challenge to Facebook’s data practices.
New Mexico argued that the social media giant misrepresented to consumers its policies for protecting personal information and addressing misinformation and hate speech.
The $25 billion penalty is the largest single judgment against Meta and the most ever awarded for consumer protection violations.
It follows a multi-state settlement this summer in which Meta agreed to pay up to $17.1 billion to avoid further litigation on child safety issues.
New Mexico was one of the few states that opted out of that settlement because it wanted to prove its consumer protection law’s strength in court.
“This case has always been about more than one company or one scandal,” Mr. Torrez said. “It is about whether corporations can mislead consumers about what happens to their personal information without facing meaningful consequences.”
In 2019, the Federal Trade Commission secured a $5 billion settlement against Meta (then called Facebook Inc.) for deceiving users about their ability to control the privacy of their personal information. It was the largest ever consumer privacy penalty at the time.
Meta cited that $5 billion penalty when requesting a proportional penalty in the New Mexico case.
New Mexico District Judge Francis J. Mathew said the 2019 settlement “cannot be viewed in a vacuum” given subsequent litigation in which Meta has been accused of violating the 20-year agreement.
The settlement required Meta’s board of directors to establish an independent privacy committee to oversee data policies and designate compliance officers to submit quarterly reports to the FTC. It also subjected the company to biennial assessments from an independent third-party assessor.
“Penalties, consent agreements and decrees have not deterred Meta from using deceptive trade practices in its representations to the citizens of New Mexico,” Judge Mathew said in the order.
The judge technically awarded New Mexico $219.5 billion, but reduced the amount Meta actually has to pay to $25 billion, plus 15% interest per year until paid in full.
New Mexico’s state constitution requires that the money be spent on capital expenditures for public education.
The order outlined the jury’s findings that Facebook CEO Mark Zuckerberg and other senior leaders at the company led a communications strategy “designed to mislead the public” and took advantage of users’ lack of knowledge about the platform’s privacy settings “to a grossly unfair degree.”
“Facebook continued making public representations concerning users’ control of data, third-party data misuse, misinformation, hate speech, and equal enforcement after employees, researchers, and senior personnel had internally identified that Facebook could not make good on its public promises,” Judge Mathew said.
Contact the author
Please read our comment policy before commenting.