New Mexico Asks Judge to Fine Meta up to $40 Billion in Facebook Privacy Case

New Mexico asked a state-level judge on Oct. 1 to impose penalties from $35 billion to $40 billion on Meta Platforms for misleading consumers about Facebook data privacy practices.

Lawyers for the state made the request at a hearing in a lawsuit brought after revelations in the Cambridge Analytica scandal that broke in 2018. The British political consultancy, which worked on Donald Trump’s 2016 presidential campaign, collected personal information from up to 87 million Facebook users through a third-party app. The users had not agreed to that collection. The firm turned the data into political profiles and targeted ads.

The hearing came after a Santa Fe jury found Facebook liable for a raft of violations of the state’s consumer protection law, potentially exposing the social media platform to billions of dollars in fines. The Sept. 25 verdict followed a roughly two-week trial stemming from a lawsuit the state of New Mexico filed in 2021 over Facebook’s handling of user data and statements it made to consumers.

Judge Francis Mathew, who oversaw the trial, will decide how much Meta must pay in financial penalties.

The jury determined that Facebook, which is owned by Meta, committed close to 43.9 million violations of New Mexico’s Unfair Practices Act through false or misleading statements to consumers. New Mexico law allows the judge to decide how much to fine Meta per violation, up to $5,000.

New Mexico alleged that Facebook misled users about how their personal information could be shared with third parties and the extent to which users could control their data. The state also challenged statements that Facebook made after the Cambridge Analytica disclosures. Facebook stated that it would investigate apps that had obtained large amounts of user information, audit suspicious developers, ban those that misused data, and notify affected users.

Overall, the jury found 26 of the 29 Facebook statements challenged by the state to be misleading. Those statements covered Facebook’s data practices, as well as how it handled so-called hate speech, misinformation, and exceptions to its platform rules.

Lawyers for Meta had argued at trial that the statements were cherry-picked and that the company had acknowledged several times that its handling of misinformation or privacy issues was not perfect.

At the Oct. 1 hearing, attorneys for Meta and the state disagreed over how much the company should be fined. Lawyers for the company said the penalties New Mexico is seeking aren’t consistent with the conduct that the state focused on during the trial.

“Well, when the parties go to trial, they roll the dice,” Mathew said. “They have to accept the consequences of their decision to go to trial, do they not?”

Randi McGinn, an attorney for New Mexico, said a large aggregate penalty was justified.

“This court should speak to Meta in the only language it understands, which is money, and the value of its stock price,” she said.

A total penalty of $35 billion to $40 billion, which represents around 20 percent of the maximum possible under the law, would affect Meta’s stock price while respecting the company’s constitutional right to due process.

Meta attorney Matt Nicholson called the state’s request an “astronomical penalty that would obviously violate a host of constitutional provisions.”

In court papers, Meta asked the judge to cap the total penalty at $3.45 billion.

Jurors called the statements misleading, the company said, but the evidence establishes that the company does not sell user data, and New Mexico did not prove that any consumer was misled.

Mathew said he intends to hand down his ruling later this month.

The Oct. 1 hearing came after a judgment was handed down in the state’s child safety case against Meta.

Filed in 2023 as State of New Mexico v. Meta Platforms Inc., that case was also heard in state district court in Santa Fe, before Judge Bryan Biedscheid. A jury in March ordered $375 million in civil penalties.

In August of this year, Biedscheid ordered Meta to pay another $567 million into a youth mental health fund. He also ordered the company to change how Facebook and Instagram work for users under 18 in the state: a 90-hour monthly usage cap on Facebook and Instagram combined, no notifications overnight or during school hours, tighter limits on adult contact, stronger reporting of sexual exploitation, improved age checks, and a ban on sexualized chatbot interactions with children.

Meta has said it intends to appeal.

Bill Pan and Reuters contributed to this report.