Meta ordered to pay $25bn fine for misleading Facebook users

A judge in the US state of New Mexico has ordered Meta to pay $25 billion in penalties for misleading Facebook users about how their personal data was handled. The case grew out of the Cambridge Analytica scandal.

Judge Francis Mathew of the First Judicial District Court in Santa Fe announced the penalty on Wednesday. In September, a jury found that the company had committed 43,899,720 willful violations of the state’s Unfair Practices Act.

The law allows a maximum penalty of $5,000 per violation. Multiplied across every violation, that would have come to about $219.5 billion. The judge reduced the amount to $25 billion but said the lower figure “should not obscure” the significance of the ruling. He described it as one of the largest state-led recoveries in US history. Meta will also pay 15 per cent annual interest until the penalty is settled.

The jury sided with the state on 31 of 34 counts. They included claims that Facebook’s privacy controls did not give users real control over their data, and that outside app developers could access user information through the platform. Jurors also found that Meta did not consistently tell users when their data had been misused, and that it misrepresented its efforts to tackle hate speech and misinformation.

The court found that Mark Zuckerberg, Meta’s chief executive, knew users did not understand their privacy settings and that the company exploited this. In one message presented at trial, Zuckerberg wrote that users “probably don’t understand their current privacy settings or care about who sees their updates.”

In setting the penalty, the judge pointed to how long and how often the conduct took place and to the involvement of senior Facebook leaders. He also cited the number of New Mexico users affected and the deliberate, systematic nature of the misleading statements.

New Mexico’s Attorney General, Raúl Torrez, called it “a historic day for New Mexico and for consumers across the country.” He said the outcome showed that no company is too powerful to be held to account. According to Axios, New Mexico was the only state to take its claims to trial; 48 others settled.

Meta says it will appeal. Its chief legal officer, C.J. Mahoney, said the ruling “makes it all but impossible to do business in the state of New Mexico.” He argued that the lawsuit “seeks to impose a tax on speech” and said, “We are confident we will prevail on appeal.”

The case goes back to 2018, when reports revealed that the British consultancy Cambridge Analytica had harvested data from more than 50 million Facebook users without their consent. The data was used to target political advertising during the 2016 US presidential election. Facebook promised greater transparency after the scandal, but the New Mexico court found it did not keep that promise.

In 2019, Facebook paid a record $5 billion penalty to the US Federal Trade Commission over the same privacy failures. Earlier this year, Zuckerberg and other Meta directors agreed to a $190 million settlement in a related shareholder lawsuit.