Meta ordered to pay $25bn in user data privacy case

A federal judge in New Mexico has ordered Meta Platforms Inc. to pay $25 billion to the state, marking the largest financial penalty ever imposed on the technology giant. The ruling, issued on Wednesday by State District Court Judge Francis J. Mathew, follows a jury determination last month that the social media company intentionally deceived users regarding the handling of their private information. The case stems from the Cambridge Analytica scandal, in which a political consulting firm improperly harvested data from millions of Facebook users for targeted political advertising during the 2016 United States presidential election. Judge Mathew stated in his written ruling that Facebook’s deception was intentional and that executives consistently misled users about how the platform operated. He noted that Facebook promised users they controlled their data, a claim he deemed false. Jurors determined that Meta committed more than 43 million violations of New Mexico consumer protection laws by making misleading public statements about its data practices. The calculation of these violations was based on the number of Facebook users or state residents who were the target audience for each specific misleading statement. Under New Mexico law, the penalty can reach up to $5,000 per violation, and the statute mandates that the entire sum flow directly into the state’s education system. New Mexico Attorney General Raul Torrez described the decision as a historic victory for consumer rights. At a press conference in Albuquerque, Torrez emphasized that the case centered on whether corporations could mislead consumers about their personal information without facing substantial consequences. He stated that New Mexico stood its ground and that the judgment serves as an unambiguous message to Silicon Valley that the state will hold tech companies accountable. Torrez highlighted that the award acts as a warning to the industry. Meta rejected the verdict, labeling the lawsuit a tax on speech. In a statement, the company argued that the ruling makes it nearly impossible to conduct business in New Mexico. CJ Mahoney, Meta’s chief legal officer, asserted that the suit attempts to enforce new rules for online expression and expressed confidence that the company would prevail on appeal. A Meta spokesperson earlier in September had said the company disagreed with the verdict and would continue to defend itself against efforts to distort its record. The legal dispute traces back to 2021, when New Mexico filed suit after revelations emerged that Cambridge Analytica had accessed data from approximately 87 million Facebook users worldwide. The firm obtained this information through a third-party personality quiz application named thisisyourdigitallife. While only about 270,000 users installed the app, it also collected data on their friends. Facebook became aware in December 2015 that Cambridge Analytica possessed the data but did not disclose the breach publicly until 2018, following a whistleblower complaint. That delay sparked widespread controversy and further scrutiny of the company’s internal policies. This is the second major judgment against Meta in New Mexico within six months. Earlier this year, jurors in a separate trial found the company liable for endangering children by making them vulnerable to predators on its platforms. That jury ordered Meta to pay $375 million. Subsequently, in August, a judge required Meta to implement product changes and pay an additional $567 million to fund treatment and prevention programs for harms caused by Facebook and Instagram. These actions resulted in nearly $1 billion in combined penalties for the state in the child safety case. Meta has faced mounting legal pressure across the United States in recent months. In August, the company agreed to pay up to $17.7 billion to 52 U.S. states and territories, along with Washington D.C., to settle claims alleging it deliberately engineered its platforms to hook young users and unlawfully collected data from children under 13. New Mexico declined to join that multi-state settlement, opting instead to pursue its own litigation strategy. Similarly, in September, TikTok agreed to pay Alabama at least $100 million and implement limits for teen users to avoid a trial over child safety claims. The legal landscape for social media firms continues to shift rapidly. In March, a Los Angeles jury convicted Meta and YouTube in a landmark trial, finding both companies responsible for a teenager’s social media addiction and awarding the plaintiff $6 million. Meanwhile, Meta reported quarterly revenue of $64.6 billion on Wednesday, exceeding Wall Street estimates of $63.37 billion. Despite the massive fine, the company maintains its stance that the New Mexico enforcement approach is excessive. The state’s pursuit of the case highlights a growing trend of individual jurisdictions taking aggressive legal action against major tech platforms, often bypassing broader national settlements to secure direct compensation for their residents.