Meta ordered to pay $25bn to New Mexico over misleading users

Meta, the owner of Facebook and Instagram, has been ordered to pay $25bn to the US state of New Mexico, after a jury found it had misled users about how their data was handled, in a case that grew out of the Cambridge Analytica scandal.

Judge Francis Mathew said a penalty of more than $219bn would have been justified under state law, but reduced it to $25bn. "Facebook's wrongdoing, over the course of years and systematically broadcast to the public, goes to the heart of Facebook's core business practices," he wrote.

Cambridge Analytica

New Mexico's attorney general sued Meta in 2021, after it emerged that Cambridge Analytica, a British political consultancy that worked on Donald Trump's 2016 presidential campaign, had harvested personal data from as many as 87 million Facebook users through a third-party app.

The state accused Meta of lying to users in New Mexico about who could see their data, how it dealt with hate speech and misinformation, and other policies. It said the company knew third parties had broad access to personal data, and tolerated harmful content when it helped its profits.

On 25 September, a jury found that 26 of 29 statements made by the company and its leaders were misleading, and that Meta had committed more than 43 million breaches of the state's consumer protection laws, based on the number of people who saw each statement. State law allows a penalty of up to $5,000 for each breach, and all of the money must go to New Mexico's schools.

Meta's case

Meta had urged the judge to cap the penalty at $3.45bn, warning that a bigger figure risked scaring businesses away from the state. In court filings, it said it does not sell user data and that New Mexico had not proved that any consumer had actually been misled. The company did not immediately comment on the judge's order.

New Mexico's lawyers had asked for between $35bn and $40bn. "This court should speak to Meta in the only language it understands, which is money, and the value of its stock price," said Randi McGinn, a lawyer for the state.

A "big tobacco moment"

It is the second verdict against Meta by a Santa Fe jury in six months. After the earlier case, a judge ordered the company to pay $567m into a fund for teenagers' mental health in New Mexico and to bring in measures to protect teenage users of Facebook and Instagram in the state.

Meta has faced a wave of lawsuits this year over user safety, which some have called a "big tobacco moment" for social media. In August it agreed to pay $17bn to settle a lawsuit brought by dozens of state attorneys general who accused it of designing addictive products that harmed children.

The company said in its latest results that its profits had been held back by a $9.9bn settlement payment in the US, although its quarterly revenue still rose by 26 per cent to $64.6bn.

In the UK, Facebook was fined £500,000 by the Information Commissioner's Office in 2018 over the Cambridge Analytica scandal, the maximum penalty allowed under the data protection law in force at the time.