Key Takeaways
- New Mexico is pushing for a court-ordered penalty of $35 billion to $40 billion against Meta Platforms.
- The legal action is rooted in the Cambridge Analytica data breach, which improperly accessed information from up to 87 million Facebook accounts.
- Jurors determined that 26 out of 29 corporate statements were deceptive, representing over 43 million state consumer protection law violations.
- Meta is fighting for a maximum penalty of $3.45 billion, arguing the state’s demand violates constitutional protections.
- A ruling from Judge Francis Mathew is anticipated before the end of the month.
Shares of Meta Platforms (META) edged higher by 0.10% on Thursday while state prosecutors in New Mexico argued the tech giant should face penalties ranging from $35 billion to $40 billion for privacy violations.
The demand was presented during proceedings in Santa Fe, building on a jury decision delivered on September 25.
That jury concluded Meta had deceived Facebook users regarding data collection and usage practices. The verdict also addressed the company’s handling of harmful content, including hate speech and false information.
At the heart of the lawsuit is the Cambridge Analytica controversy. The now-defunct British consulting firm, which supported Donald Trump’s 2016 presidential bid, improperly obtained personal information from up to 87 million Facebook accounts via a third-party application.
Jury Verdict Breakdown
The jury examined 29 separate statements issued by Meta and its executives. Twenty-six were deemed deceptive or misleading.
This resulted in a tally exceeding 43 million infractions under state consumer protection statutes. The violation count reflects the number of Facebook users and New Mexico residents exposed to each questionable statement.
During the trial, Meta’s legal team contended that prosecutors selectively highlighted statements out of context. The company acknowledged it had room to improve its approach to privacy safeguards and content moderation.
Under state regulations, the presiding judge can impose fines up to $5,000 for each violation. Randi McGinn, representing New Mexico, acknowledged that imposing the maximum would likely trigger constitutional due process objections.
Competing Penalty Proposals
McGinn proposed the $35 billion to $40 billion range instead. She characterized this sum as roughly 20% of the theoretical maximum and argued it would meaningfully impact Meta’s market valuation while staying within constitutional boundaries.
“This court should speak to Meta in the only language it understands, which is money, and the value of its stock price,” McGinn told the judge.
Meta’s counsel, Matt Nicholson, vigorously opposed the proposal. He described the state’s penalty demand as an “astronomical penalty” that would breach several constitutional safeguards.
In written submissions, Meta requested the judge limit any financial sanction to $3.45 billion. The company insists it never monetized user data and contends the state produced no evidence that consumers were actually deceived.
Judge Mathew delivered pointed remarks during Thursday’s hearing. When Meta challenged the magnitude of the proposed fine, he emphasized that choosing to proceed to trial carries inherent risks.
“They have to accept the consequences of their decision to go to trial, do they not?” he said.
The litigation originated in 2021. State prosecutors alleged Meta systematically misrepresented its data-sharing practices and downplayed the prevalence of toxic content on Facebook.
New Mexico’s complaint asserted the company permitted hate speech and misinformation to flourish when restricting such content might have harmed revenue. This allegation became a pivotal element throughout the legal proceedings.
Judge Mathew indicated he plans to announce his penalty decision before month’s end. The final amount Meta will be required to pay remains uncertain.
The case is formally designated as State of New Mexico, et al., v. Meta Platforms, Inc., case number D-101-CV-2021-00132, in the First Judicial District Court of New Mexico.
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