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Meta Faces $25 Billion Penalty Linked to Cambridge Analytica Scandal
A New Mexico judge ordered Meta to pay $25 billion for misleading users about privacy, setting a record penalty. Meta plans to appeal.
This week a New Mexico judge ordered Meta to pay the state $25 billion. The order follows a jury finding that the company deceived Facebook users about their privacy, and it’s the biggest fine ever imposed on Meta. State District Court Judge Francis J. Mathew wrote that Facebook’s deception was intentional and that executives consistently misled users about how the platform worked.
“Facebook promised users that they (the users) controlled their data. This was false,” he said, as reported by the Associated Press.
This is a case about promises, not about a breach. Jurors found in September that Meta committed over 43 million violations of New Mexico consumer protection laws by making misleading public statements about how it handled users’ personal data. The case grew out of the Cambridge Analytica scandal, in which a political consulting firm harvested Facebook data to build targeted political ads for the 2016 election.
New Mexico had asked the court to fine Meta between $35 billion and $40 billion, arguing that only a large penalty would push the company to change its behavior. Meta’s lawyers said the fine should not exceed $3.4 billion and argued that any higher amount would be unconstitutional. The jury found more than 43 million violations, including 2.1 million under specific claims. Each violation can carry a fine of up to $5,000.
New Mexico Attorney General Raúl Torrez said the ruling sends a clear warning to technology companies that they must follow the law. Under the state’s constitution, fines for consumer protection violations go toward education. However, the money may remain tied up while Meta appeals the decision.
Meta plans to appeal the $25 billion ruling. The company argues that the decision and the way New Mexico is enforcing consumer protection laws make it almost impossible to operate in the state. Meta’s chief legal officer, C.J. Mahoney, says the case is an attempt to restrict free speech and impose new rules on what people can say online. The company says it is confident it will win the appeal. Meta’s lawyers also argued that the state failed to prove that residents had actually seen the misleading statements or suffered harm as a result.
Meta is worth $1.8 trillion and brought in more than $200 billion in revenue last year, and its shares rose 2% after the announcement, with earnings due that day. A nonprofit director called $25 billion a drop in the bucket for Meta, though he said it shows people want accountability. Both can be true: the company says doing business in New Mexico is all but impossible, and Wall Street shrugged.
The history explains why the number is so large. Cambridge Analytica got data through a personality quiz app that around 300,000 people took, and the app also pulled data on their friends, building a dataset of 87 million profiles. Meta banned the app in 2015 and asked Cambridge Analytica to delete the data, and the firm shut down in May 2018. The company later agreed to pay $725 million in December 2022 to settle a class action over sharing with Cambridge Analytica, and the FTC fined it $5 billion in 2019, a fifth of today’s award.
New Mexico was not part of the $18 billion settlement Meta reached in August with almost all other US states and territories. The deal includes stronger child-safety measures and $459 million related to the Cambridge Analytica scandal. This is Meta’s second legal defeat in New Mexico in six months. In March, a jury ordered the company to pay $375 million for misleading users about children’s safety.
Meta’s appeal could reduce the $25 billion fine if a court lowers the number of violations. The case also sends a warning to companies: privacy promises have legal consequences. As the judge stated, Facebook told users they controlled their data, but this was not true.
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(SecurityAffairs – hacking, Cambridge Analytica Scandal)
