Meta has been fined $25 billion by a New Mexico court for misleading users about privacy and data protection.
A New Mexico court has ordered Meta to pay $25 billion for misleading Facebook users about their personal data privacy and content moderation practices. This ruling, made by Judge Frances Matthew, stems from a lawsuit filed in 2021.
In a trial held in September, jurors identified 43.9 million violations of the state’s Unfair Practices Act, finding 26 public statements made by Meta between May 2010 and August 2021 to be false or misleading.
The law allows for fines of up to $5,000 per intentional violation, resulting in a potential total of $219.5 billion; however, the court reduced the amount to $25 billion. The unpaid sum will accrue interest at a 15% annual rate.
New Mexico Attorney General Raúl Torres described the ruling as one of the largest, if not the largest, in state history against a corporation.
Background of the Case
The lawsuit was prompted by the Cambridge Analytica scandal, where it was revealed in 2018 that the British consulting firm accessed personal data of up to 87 million Facebook users without consent. This information was utilized to create psychological profiles for targeted political advertising, notably during Donald Trump’s 2016 presidential campaign.
Meta was accused of spreading false information regarding who could access user data, how it was protected, and its efforts against misinformation and hate speech. The court found that Facebook had granted third-party developers access not only to users' data but also to their friends' information without their knowledge.
Although Facebook announced the cessation of such practices in 2014, internal documents suggested exceptions were made for select commercial partners, contrary to public assurances to limit third-party access to personal data.
Additionally, internal communications from Facebook’s leadership, including Mark Zuckerberg and Sheryl Sandberg, revealed an understanding that users might not fully grasp privacy settings, while also indicating a reluctance to actively encourage users to adjust these settings.
Concerns were also raised regarding content moderation practices, specifically the CrossCheck system that allowed certain accounts to avoid immediate removal pending further review. The judge noted that the misleading statements were systemic and fundamental to Facebook's business model.
Meta's Response
Meta has expressed its intention to appeal the decision, arguing that the ruling could hinder business operations in New Mexico. Meta's legal director, C.J. Mahoney, asserted that the lawsuit aims to impose restrictions on free speech and create new internet speech regulations. He is confident that the company will prevail in the appeals process.
During the trial, Meta's lawyers contended that the state failed to demonstrate actual harm to residents. A key point of contention was the method of calculating violations, as jurors considered the number of New Mexico residents who might have seen the misleading statements rather than the number of directly affected users, which Meta claims is inappropriate.
According to Associated Press, the fines will be allocated to a state educational funding pool, but payments will be paused pending the appeal. New Mexico authorities are also seeking a court order to prevent similar practices in the future, with a ruling on this request still pending.
Meta has faced significant fines for privacy violations before, agreeing to pay $5 billion to the Federal Trade Commission in 2019 to settle claims related to user data handling. Additionally, in July 2023, an Australian court fined Meta $14 million for covertly collecting personal data through its Onavo VPN app, which tracked users' activity across other applications.
