A New Mexico judge ordered Meta to pay $25 billion on Wednesday for deceiving users about its data privacy practices, one of the largest penalties levied against a tech giant.
New Mexico sued Meta in 2021 over a scandal involving the political consulting firm Cambridge Analytica, saying the social media company had misled users with its public statements about their data privacy. Last month, after a two-week trial, a jury in the State District Court in Santa Fe ruled against Meta, saying the company had committed 43 million violations of New Mexico’s consumer protection laws. Each violation carried a penalty of up to $5,000.
On Wednesday, Judge Francis J. Mathew of the State District Court in Santa Fe issued the landmark penalty.
“The harm in this matter is difficult to overstate, and goes to the heart of Facebook’s basic business proposition,” Judge Matthew wrote in a 20-page judgment. He said the “extraordinary number of willful violations” that repeated over years “support the highest level of penalty.”
The order is the biggest blow yet to Meta, which owns Facebook, Instagram and WhatsApp, as it has racked up court losses over the harms that its social media platforms have caused users. States and consumers have filed thousands of lawsuits over issues such as how Facebook and Instagram endangered child safety, led to social media addiction, used people’s data without their consent and infringed on their privacy.
New Mexico has been leading the charge against Meta, and winning. In August, a New Mexico judge ordered the company to pay $567 million in damages after a jury ruled the company had enabled harm to young users, on top of a $375 million penalty from the same case in March.
In both cases, New Mexico accused Meta of violating state consumer protection laws, which have emerged as an effective way to litigate tech companies that have been previously shielded by laws that protect free speech, said Vincent Joralemon, the director of the Life Sciences Law and Policy Center at the Berkeley Center for Law and Technology.
“The takeaway from this will be that consumer protection laws will be the way to hold tech companies accountable,” Mr. Joralemon said, adding that the penalty could inspire other states to pursue similar lawsuits.
In August, Meta reached a landmark settlement with 47 states, the District of Columbia and U.S. territories, agreeing to pay up to $17.1 billion in penalties and make major changes to its products over claims it endangered children with addictive social media platforms. As part of that settlement, Meta agreed to pay $459 million to settle similar privacy claims regarding Cambridge Analytica, meaning other states are unlikely to pursue the charges that New Mexico did.
New Mexico will apply the $25 billion awarded on Wednesday toward a public education fund, according to the state.
“For too long, powerful technology companies have operated as though their size and influence put them beyond the reach of the law,” Raúl Torrez, the attorney general of New Mexico, said in a statement. “Today’s result makes clear that no corporation is too powerful to be held accountable.”
Meta said it would appeal the decision.
“At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online,” C.J. Mahoney, Meta’s chief legal officer, said in a statement. “We are confident we will prevail on appeal.”
The data privacy case in New Mexico was in some ways a throwback to an earlier tech era, when social media — and not artificial intelligence — was in the spotlight. In 2018, The New York Times and other publications reported that the British firm Cambridge Analytica had acquired the private data of tens of millions of Facebook users without their knowledge to build profiles of American voters.
The revelations set off an outcry over how Facebook was harvesting people’s information and treating their privacy. Facebook, like many social media platforms, is offered as a free digital service, but users provide their information to the sites and are targeted with ads. Mark Zuckerberg, the chief executive, appeared in Congress to testify on his company’s handling of data.
Over a two-week trial last month, lawyers for New Mexico presented evidence on how Meta’s executives mislead users with statements about their privacy. The lawyers contrasted public comments from Mr. Zuckerberg and Sheryl Sandberg, then Meta’s chief operating officer, against their private email conversations.
Meta’s lawyers argued that its users have the power to choose what data they share on the platform, and said its policies around third-party companies harvesting Facebook data had changed significantly since 2018.
Mr. Zuckerberg did not testify at the trial, but a video of his hour and half long deposition was shown to the jury.
The jurors ultimately found that 26 of the 29 statements made by Meta and its executives were unfair or deceptive.
New Mexico had asked for as much as $40 billion. Judge Matthew awarded the state $219 billion in damages before reducing the penalty to $25 billion.
In the first half of this year, Meta made $42.62 billion in profit. The company is valued at roughly $1.8 trillion.
Most states will not be able to sue Meta for the same data privacy violations related to Cambridge Analytica, because they have already settled their cases, Mr. Joralemon said. But the door could still be open to sue Meta for other violations on the same grounds of the company’s violating consumer protection laws and making false statements, he added.
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