Meta ordered to pay $25B after jury finds it misled users on data privacy

Meta Platforms has been ordered to pay $25 billion after a New Mexico jury found the company misled Facebook users over its handling of personal data and other practices in a case stemming from the Cambridge Analytica scandal.

New Mexico Judge Francis Mathew issued the penalty Wednesday after jurors found last month that Meta made dozens of misleading statements to users.

"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 in his order.

The now-defunct Cambridge Analytica, which worked for President Donald Trump's 2016 campaign, obtained information from as many as 87 million Facebook users through a third-party app without their consent.

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New Mexico sued Meta in 2021, accusing the company of misleading users about who could access their personal information and how it handled harmful content on the platform.

Jurors found that 26 of 29 statements examined during the trial were misleading and determined that Meta committed more than 43 million violations of New Mexico's consumer protection laws.

Mathew said the violations could have resulted in a penalty of more than $219 billion under state law but ultimately reduced the amount to $25 billion. Meta had urged Mathew to limit the penalty to $3.45 billion.

New Mexico Attorney General Raúl Torrez said the ruling was one of the largest ever against Meta by a single state.

"It has been a long time coming holding Big Tech accountable," Torrez said. 

"I think today's judgment is a clear break with that past and a very clear warning to those in this space and beyond that we intend to protect our people and protect our consumers."

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Meta said it plans to appeal the ruling.

"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," C.J. Mahoney, Meta's chief legal officer, 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. In the meantime, Meta will continue to build a safe and free platform to connect millions of Americans, grow small businesses, and help the country maintain its competitive edge." 

Monte Mann, a business litigation partner at Armstrong Teasdale, said in a statement to FOX Business that the size of the penalty highlights the potential exposure major technology companies face under state consumer protection laws.

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"The $25 billion figure is staggering, even for a company like Meta," Mann said. "But the bigger story is what this case tells us about the exposure that large technology companies face under state consumer protection laws. New Mexico took on one of the most powerful companies in the world and won. 

"And what’s particularly interesting is how the penalties for individual violations can add up to an extraordinary amount when you're dealing with millions of consumers. I wouldn’t assume, though, that Meta is going to end up paying anything close to $25 billion."

Mann said he expects Meta to mount a "serious fight on appeal."

"There will undoubtedly be a serious fight on appeal over the size of the penalty and whether it’s legally sustainable. But even if that number gets reduced substantially, the case sends a powerful message. 

"Companies need to be careful about the promises they make to consumers, particularly when it comes to privacy. Those promises can come back to haunt them in a courtroom, and the consequences can be enormous."

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Reuters contributed to this report.