Under the New Mexico Constitution, fines for violating consumer protection laws go toward state education spending.
“We’ve probably paid for the next 100 years of school construction,” Torrez said, acknowledging that the money will be tied up as Meta appeals.
Representatives for Meta previously said they planned to appeal the September verdict but did not immediately respond to a message seeking comment on the amount. The Menlo Park, Calif.-based company is scheduled to report quarterly earnings Wednesday afternoon, and shares rose 2% following the penalty announcement.
New Mexico Goes Alone
In August, Meta settled with nearly every state and territory (except New Mexico and Florida) to pay $18 billion and add stronger child safety measures to its Facebook and Instagram platforms.
The settlement ends a trial over teen social media addiction and resolves a key case that has been ongoing for years trying to hold the tech giant accountable for the role its platforms have played in undermining children’s mental health. The goal of this work is features that attract the attention of young people.
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New Mexico is not participating in the multistate settlement because it is pursuing its own case.
In September, a jury found Meta responsible for more than 43 million violations of New Mexico’s consumer protection law after political consulting firm Cambridge Analytica harvested Facebook user data to generate targeted political ads for the 2016 election.
“Facebook promised its users that they would control their data. That was wrong,” Judge Francis J. Matthew wrote in the decision.
Lawyers for New Mexico are seeking $35 billion to $40 billion in damages, arguing the company would only change the way it does things if the amount affects its stock price.
Meta’s lawyers have argued for a payment of no more than $3.4 billion. They said a ruling of ten times or more would violate due process, be unconstitutional and would not stand up on appeal.
Mehta argued that the state failed to prove misleading statements about privacy and that content moderation actually harmed New Mexicans. Penalty interest will accrue during the appeal, but the number of violations Meta is charged with may be reduced.
Meta lawyer Matt Nicholson argued in court that a sum of up to $40 billion would be “a shock to the conscience,” while New Mexico attorney Randi McGinn urged standing up to “tech giants who think they are invulnerable and can do whatever they want.”
The fine in this case far exceeds the $5 billion fine levied against Facebook by the Federal Trade Commission in 2019.
Companies argue government failed to prove harm
The state’s case focuses on accusations that Facebook deceived users over a data breach stemming from a third-party personality quiz that collected data from about 87 million profiles and sold it to political consulting firm Cambridge Analytica to generate targeted ads. The now-defunct firm’s clients included President Donald Trump’s 2016 campaign.
Lawyers for New Mexico argue that the entire population of the state, not just Facebook users, were deceived by the company’s public statements about privacy on the platform. Lawyers for Facebook argued that the state failed to prove whether people were actually harmed by the deceptive statements.
“The jury did not find that any New Mexico person heard or saw these remarks or was harmed by them,” Nicholson said during the Oct. 1 hearing.
New Mexico prosecutors also argued that Facebook allowed misinformation or violent content to proliferate on the platform. Defense lawyers have strongly denied the accusations and said the company’s content moderation policies are strong and must take into account free speech.
Jury finds millions of violations
New Mexico became the only state to hold a trial over the Cambridge Analytica scandal, after 48 other states signed an $18 billion settlement in August.
Besides New Mexico, Florida is the only state that has not signed the settlement, which includes an agreement exonerating Meta from future liability related to the Cambridge Analytica privacy breach.
During the trial, the jury evaluated 34 times whether Facebook misled users about privacy and content moderation. However, state prosecutors argued that Facebook’s statement deceived the entire population of New Mexico and went beyond social media users.
Ultimately, the jury agreed with that premise and found Facebook responsible in some way for 2.1 million breaches, bringing the total to more than 43 million.
Lawyers for Facebook argued in subsequent court filings that the state’s consumer protection laws did not apply to New Mexico people who were not using the platform at the time.
After the verdict, Torrez told reporters that all winnings would be donated to the state’s education system. The state is also seeking an injunction to stop similar practices.
Meta-challenge evidence and statistics of violations
In appealing the jury’s verdict, Meta may reduce the number of violations, thereby reducing the total fine. Lawyers for the company said it was unprecedented for the state to count violations based on how many people were likely to hear or see the company’s misleading statements, arguing there was no evidence the statements ever harmed anyone.
In closing arguments, Facebook’s lawyers said the state’s evidence was outdated and that although New Mexico spent five years collecting the information, it had only discovered one other breach.
In one of the defense’s few victories, jurors found that the state failed to prove that Facebook made false claims about removing harmful content, including misinformation about the COVID-19 pandemic.
The state said the company favored certain accounts and allowed violent or inaccurate content to proliferate. Attorney Randy McGinn said in closing arguments defending the state that Facebook profits from harmful content, something CEO Mark Zuckerberg denied in filmed testimony. Zuckerberg said companies must carefully balance free speech and content moderation.
Lawyers for Facebook said the company had adjusted its policies and removed 99% of content that violated its standards since the state filed its lawsuit in 2021.
Shuttler reported from Phoenix. Shuttler is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.
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