New Mexico Court Orders Meta to Pay 25 Billion Dollars

A New Mexico judge has ordered Meta to pay $25 billion in civil penalties over allegations that the company misled state residents about its collection and protection of user data. The ruling, issued Wednesday in a case stemming from the Cambridge Analytica scandal, followed a jury's finding that the social media company violated the state's consumer protection law.

According to a court filing, the jury found Meta responsible for more than 43 million violations of New Mexico's Unfair Practices Act in September. Although the filing initially showed an award of $219.5 billion, the final penalty was reduced to $25 billion.

Each violation carried a potential civil penalty of up to $5,000. District court judge Francis Mathew determined the final amount, citing the number, duration and deliberate nature of the violations, as well as the involvement of senior company leadership and the size of the audience affected.

Mathew explained in the filing that the evidence supported imposing the maximum statutory penalty for the violations identified by the jury.

"The extraordinary number of willful violations found by the jury, the duration and repetition of the conduct, the breadth of subjects on which violations occurred, the involvement of senior Facebook leadership, the size of New Mexico audiences reached, and the clear intentional and systematic nature of Facebook's repeated misstatements established in the trial record support the highest level of penalty allowed by the New Mexico Unfair Practices Act - $5,000 per violation found by the jury," New Mexico district court judge Francis Mathew wrote in the filing.

The order also provides for annual interest on the penalty until the amount is paid in full. Meta's response to the latest order was not included in the source report, which said CNBC had contacted the company for comment.

Mathew also addressed Facebook's internal response to the Cambridge Analytica revelations, finding that the company had failed to carry out the investigation it had promised after the scandal emerged.

"Facebook did not conduct the comprehensive investigation that it promised" following the Cambridge Analytica revelations, Mathew wrote in the filing.

The filing attributed the shortcomings to several internal factors, including pressure to control costs, inadequate enforcement resources, investigative weaknesses and concerns about establishing precedents for future inquiries.

It described these factors as contributing to a "willfully ineffective" internal examination by Facebook.

New Mexico's lawsuit was initially filed in 2021 by then-state Attorney General Hector Balderas. Current Attorney General Raúl Torrez oversaw the trial that led to the September jury finding.

The case proceeded separately from a broader settlement reached in August involving nearly $17 billion and a coalition of state attorneys general in a federal case concerning child safety and mental health. New Mexico was not part of that settlement, allowing its Cambridge Analytica-related privacy lawsuit to continue.

Meta had previously agreed in 2022 to pay $725 million to resolve a class-action lawsuit arising from the same scandal. The controversy centered on allegations that political consulting firm Cambridge Analytica improperly obtained information belonging to 87 million users, raising questions about Facebook's handling of personal data.

The New Mexico case followed another legal setback for Meta in the state. In March, a jury found the company liable for violations of the Unfair Practices Act in a separate child-safety case and determined that it should pay $375 million.

A judge subsequently ordered Meta to contribute $567 million to an abatement fund during a second phase of that proceeding, which examined whether the company's conduct created a public nuisance. Meta disputed that ruling and said it planned to appeal.