SANTA FE, N.M. — A New Mexico judge on Wednesday ordered Meta Platforms to pay $25 billion in civil penalties, after a jury found that Facebook systematically misled users about how their personal information was handled — one of the largest financial penalties ever imposed on a corporation in the United States.
State District Judge Francis J. Mathew set the penalty in the state’s 2021 consumer-protection case against the company, weeks after a Santa Fe jury found Meta liable for more than 43 million violations of New Mexico’s Unfair Practices Act, Reuters reported. Attorney General Raúl Torrez called it “one of the largest, if not the largest, single state verdict against a company in American history.”
How the number got so large
The arithmetic of New Mexico law did most of the work. Jurors examined 29 public statements Facebook had made about user data, privacy settings and content practices, and found 26 of them misleading. Because the statements reached the state’s users again and again over years, the jury counted more than 43 million separate violations. At up to $5,000 per violation, Judge Mathew found that a penalty of more than $219 billion was warranted under the statute — then reduced it to $25 billion. The state had asked for $35 billion to $40 billion; its lawyer, Randi McGinn, argued the court “should speak to Meta in the only language it understands, which is money, and the value of its stock price.” Meta had urged a far smaller figure — no more than $3.45 billion at a hearing, and $1.53 billion in a written brief — and had warned that a penalty in the billions risked violating its constitutional rights to due process and protection from excessive fines.
The judge’s language was unsparing. “Facebook’s wrongdoing — over the course of years and systematically broadcast to the public — goes to the heart of Facebook’s core business practices,” Mathew wrote. He described the company’s misrepresentations about users’ control of their data as “not isolated incidents, but rather a systematic pattern of deception at the core of Facebook’s business model,” according to CNN‘s account of the ruling, and called the investigation Facebook promised after the scandal “willfully ineffective.”
What the case was — and was not — about
The case grew out of the Cambridge Analytica scandal, in which a personality-quiz app harvested data from as many as 87 million Facebook profiles and passed it to a political consulting firm that worked for Donald Trump’s 2016 presidential campaign. But the New Mexico trial was not, strictly, about the harvesting itself. The state argued that Facebook deceived New Mexico users about who could access their data, how it protected privacy, and how it handled hate speech and misinformation — and that the company knew third parties enjoyed broad access to personal data while tolerating harmful content when it served the bottom line. The scandal has cost Meta before: the U.S. Federal Trade Commission imposed a $5 billion penalty in 2019, then a record. Wednesday’s judgment is five times that.
The ruling is also separate from the litigation over harm to teenagers. In August, Meta reached a $17.1 billion multistate settlement resolving states’ claims that its platforms harmed teen mental health; six states separately settled Cambridge Analytica claims for $459.2 million as part of that broader resolution. New Mexico held out, took its privacy case to a jury, and won far more — a gamble Torrez framed as a warning to the whole industry. “This judgment should be a signal, an unambiguous message to anyone in Silicon Valley and beyond that New Mexico will stand strong and go to court,” he said. Under state law, Unfair Practices Act penalties fund public education, and the award — which Bloomberg Law reported will accrue interest at 15 percent a year until paid — exceeds New Mexico’s entire projected annual general-fund revenue of $14.8 billion.
Meta’s response
Meta said it will appeal. “This ruling, and the Attorney General’s approach to this enforcement, makes it all but impossible to do business in the state of New Mexico,” the company’s chief legal officer, C.J. Mahoney, said in a statement. “At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online. We are confident we will prevail on appeal.” Investors, for now, appear to share that confidence: Meta’s shares closed up less than 1 percent on Wednesday at $697.52 and rose further after the company issued an upbeat earnings outlook, suggesting markets expect a long appellate fight rather than a $25 billion payment anytime soon.
What happens next
The case now heads to New Mexico’s appellate courts, where Meta is expected to press its due-process and excessive-fines arguments — the same constitutional battleground on which other outsized statutory penalties have been trimmed. No stay of the judgment had been announced as of Wednesday, and Meta has not said whether it will post a bond while the appeal proceeds. Whatever the outcome, the verdict has already changed the industry’s risk calculus: it shows that a single state, using an ordinary consumer-protection statute and a per-violation penalty, can put a sum larger than most companies’ annual profits in front of a jury — and win.
Sources: Reuters; CNN; USA Today; Bloomberg Law; Engadget.
