New Mexico demands a fine of up to $40 billion from Meta
New Mexico is demanding a $35–40 billion fine from Meta for deceiving Facebook users. The European Commission has found signs of DSA violations in the platforms' design.
The state of New Mexico has asked a court to impose a fine of $35 to $40 billion on Meta. The grounds: a jury verdict finding that the company misled Facebook users about the privacy of their data. This demand has become the largest financial claim against the company in the recent practice of American states in the field of consumer data protection.
The jury previously established the fact of deception: Meta presented Facebook users with a distorted picture of how it handles their personal data. The state of New Mexico insists that the scale of the violation and the number of affected users justify a sanction in the tens of billions of dollars.
At the same time, the company has come under pressure on the other side of the Atlantic. The European Commission, in a preliminary investigation, concluded that Meta violated the EU Digital Services Act (DSA). The reason is the design of the Facebook and Instagram social platforms, which, in the regulator's view, creates addiction among users. This conclusion is set out in the preliminary materials of the European Commission's investigation.
On Monday, EU antitrust regulators filed formal charges against Meta Platforms, Reuters reports. According to them, when launching the ad-supported version of Facebook and Instagram, the company reduced users' level of privacy and thereby violated the rules in force. This concerns a model in which users can use the services without ads, but in doing so Meta, according to the regulators, collects more data than justified.
Thus, Meta has to defend itself on two fronts at once. In the United States — a lawsuit with New Mexico's demand for a fine of up to $40 billion. In the EU — proceedings in two directions at once: under the Digital Services Act due to the "addictive" design of the platforms, and under antitrust law due to the advertising model and privacy.
Regulatory pressure on large technology companies has been intensifying in recent months. The European Commission's precedents of fines under digital legislation create a risk of noticeable hits to profits for platform companies — a situation that has already caused concern among shareholders of other market players, including Alphabet, whose behavior toward users and lawmakers has repeatedly been the subject of criticism.
For Meta's advertising business, the European proceedings have a direct financial dimension: the antitrust charge related to the reduction of privacy when launching the ad-supported version of the services calls into question the very model of monetizing user data in the EU. The company's response and the size of possible sanctions will be determined by the outcomes of further proceedings both in the American court and in European instances.
Against the backdrop of news about fines, business activity in the region continues. UXDA, a company specializing in digital experience design, has chosen a Class A building in the Preses Nama quarter in Riga as its new headquarters. The new tenant has reserved a quarter of the office space in the building, which will soon be completed. The choice of location was driven by its position, panoramic views of Riga and the Daugava River, as well as the architectural appearance of the business center.
Source: Äripäev Turundus
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