Meta faces $25B penalty in New Mexico privacy case
A New Mexico judge ordered Meta to pay $25 billion for misleading users about privacy and hate speech, stemming from the Cambridge Analytica scandal. A jury found 43 million violations of state law. The penalty, significantly lower than the maximum $219 billion, reflects the state's request for up to $40 billion. Meta plans to appeal, arguing the fine is a constitutional violation. The ruling highlights ongoing legal risks for social media giants regarding data transparency.
Key points
- Meta, the parent company of Facebook and Instagram, was ordered to pay a $25 billion civil penalty to the state of New Mexico.
- The ruling stems from a 2021 lawsuit related to the 2018 Cambridge Analytica scandal, where a jury found 43 million violations of the state's Unfair Practices Act.
- Judge Francis Mathew reduced the maximum potential penalty of $219.5 billion to $25 billion, falling between the state's $35–40 billion request and Meta's $3.45 billion counter-offer.
- New Mexico Attorney General Raúl Torrez described the verdict as a long-overdue accountability measure for Big Tech, while Meta's legal team called it a 'constitutional violation.'
- The case focused on misleading statements regarding data privacy, third-party app access, and hate speech moderation, with senior executives like Mark Zuckerberg cited for public representations.
- Meta plans to appeal the decision, arguing the penalty makes it difficult to operate in New Mexico, though the ruling stands as one of the largest US tech verdicts.
A New Mexico judge has ordered Meta to pay a $25 billion civil penalty for misleading consumers about data privacy and content moderation. The ruling, issued on Wednesday, resolves a lawsuit filed in 2021 that originated from the 2018 Cambridge Analytica scandal. In September, a jury in Santa Fe found that Meta committed more than 43 million violations of the state's Unfair Practices Act, primarily by making inconsistent public claims about how user data was protected and how hate speech was managed.
Judge Francis Mathew applied the maximum statutory penalty of $5,000 per violation, which initially totaled $219.5 billion. He reduced this figure to $25 billion, a sum that sits between the state's request of $35 billion to $40 billion and Meta's argument for a cap of $3.45 billion. The judge noted that the "clear intentional and systematic nature" of the misstatements, involving senior leadership, justified the high penalty. New Mexico Attorney General Raúl Torrez stated that the verdict holds Big Tech accountable for years of deceptive practices.
Meta's legal team, led by Chief Legal Officer C.J. Mahoney, described the ruling as a "constitutional violation of epic proportions" that taxes speech. They argued that the penalty makes it difficult to do business in the state. Despite the significant financial hit, Meta plans to appeal the decision. The case underscores the growing legal scrutiny on social media platforms regarding their transparency and the long-term financial impact of data privacy scandals.
Sources
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