Meta was ordered by a judge in New Mexico to pay $25 billion to the state after a jury found that the social media company misleading consumers for years about its data protection policy.
Judge Francis Mathew handed down the amount, which New Mexico Attorney General Raúl Torrez described as “one of the largest, if not the single largest state judgment against a company in American history.”
“This verdict should be a signal, an unequivocal message, for Silicon Valley,” Torrez said at a press conference.
In September, jury members found that Facebook made false or misleading statements by telling consumers that they controlled how their information was shared. The social media giant also misled consumers by claiming it did not sell or share personal information with advertisers, the jury concluded.
The jury found that the company’s “top leadership,” including Meta CEO Mark Zuckerberg and former Chief Operating Officer Sheryl Sandberg, made false representations about the service’s privacy policy, the judge ruled.
“These communications were part of a coherent strategy designed to deceive the public,” Mathew wrote.
The case stems from allegations that Facebook misled users about a data breach stemming from a third-party personality quiz that collected data from about 87 million profiles and sold it to a political consulting firm, Cambridge Analyticato generate targeted advertising.
In a statement Wednesday, Torrez said the case was “always about more than one company or one scandal.”
He added, “It’s about whether companies can mislead consumers about what happens to their personal information without meaningful consequences.”
CJ Mahoney, Meta’s Chief Legal Officer, said in a statement that the company is confident it will “prevail on appeal.”
“This ruling, and the Attorney General’s approach to this enforcement, makes it all but impossible to do business in the state of New Mexico,” Mahoney said. “At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online.”
Where the 25 billion dollars could go
Under the New Mexico Constitution, fines for violations of consumer protection laws go toward state education expenses.
“We may have paid for the construction of schools for the next 100 years,” Torrez said, while noting that the money will be tied up if Meta appeals the decision, as expected.
Forty-eight other states have settled with Facebook in a national case, but New Mexico has chosen to take the social media company to court on its own.
Lawyers for New Mexico had sought $ 35 billion to $ 40 billion, arguing that the company would only change its ways with a sum large enough to affect its share price.
Lawyers for Meta said the company should not have to pay more than $3.4 billion, arguing that a much larger award would violate due process, be unconstitutional and not stand up to appeal.
In 2019, the Federal Trade Commission slammed Facebook, then called Meta, with a fine of 5 billion dollars about its role in allowing Cambridge Analytica to collect user data without their consent.
Meta argued that New Mexico failed to prove that the tech giant’s executives made misleading statements about privacy and that its content moderation practices harmed state residents.
Shares of Meta rose $13.56, or 2%, to $707.81 in Wednesday afternoon trading.