Court Orders Meta to Pay $25 Billion for Deceiving Users
A New Mexico court ordered Meta to pay $25 billion for deceiving users about privacy. The fine will go to the state's schools, Meta is preparing an appeal, and shares rose 2%.
A New Mexico court has ordered Meta to pay $25 billion for misleading consumers about the privacy of their personal data. The ruling on the amount of damages was issued by Judge Francis Mathew. State Attorney General Raúl Torrez called the verdict "one of the largest — if not the largest — judgments against a company in US history."
"This ruling should serve as a signal, an unambiguous message to Silicon Valley," Torrez said at a press conference.
What Was Meta Accused Of?
In September, a jury concluded that Facebook had misled its users. The company promised people control over how their personal information was shared — and failed to provide it. In addition, in the jury's view, Meta made false statements claiming it did not sell or pass personal data to advertisers.
Judge Mathew specifically pointed to the role of senior management. Misleading information about privacy policies was provided, among others, by CEO Mark Zuckerberg and former COO Sheryl Sandberg, he said.
"These statements were part of a deliberate strategy aimed at misleading the public," Mathew wrote in his ruling.
How Is the Case Connected to Cambridge Analytica?
The litigation grew out of the Cambridge Analytica scandal. A third-party personality-testing app collected data from roughly 87 million Facebook profiles. The information was then passed to the political consulting firm Cambridge Analytica, which used it to create targeted advertising.
Torrez emphasized that the case is about more than one company and one leak.
"This is about whether corporations can mislead consumers about what happens to their personal data without facing serious consequences," the attorney general said.
How Did Meta Respond?
The company disagreed with the ruling. Meta Chief Legal Officer CJ Mahoney said the company expects to have the verdict overturned on appeal. According to him, the decision and the prosecutors' approach to law enforcement effectively make it impossible to do business in New Mexico. Mahoney also called the lawsuit an attempt to impose a kind of "tax on speech" and to force new rules on what people can say online.
Meta added that state authorities had failed to prove either that its leadership made misleading statements about privacy or that its content moderation practices harmed the state's residents.
Why This Fine?
The state had sought more. New Mexico's lawyers asked for damages of $35 to $40 billion, arguing that Meta would only change its policies if the fine were large enough to affect its stock price. The company's representatives insisted on a ceiling of $3.4 billion, arguing that a larger fine would violate due process principles, contradict the constitution, and would not survive an appeal.
New Mexico was the only state to pursue a separate trial: the other 48 settled their claims against Facebook as part of a nationwide proceeding.
Where Will the Money Go?
Under New Mexico's constitution, fines for violations of consumer protection law go toward funding the state's education system. "We may have just funded the building of schools for the next 100 years," Torrez said. Access to the funds, however, will be blocked if Meta files an appeal — and the company has already announced plans to do so.
This is not Meta's first fine over Cambridge Analytica: in 2019, the US Federal Trade Commission fined Facebook $5 billion for sharing user data without their consent.
The market was not frightened by the verdict. In Wednesday trading, Meta shares rose $13.56, or 2%, to $707.81.
Original: cbsnews.com
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