Meta, the parent company of Facebook, Instagram and WhatsApp, has been ordered by a New Mexico judge to pay $25 billion for misleading the public about its handling of Facebook users’ personal data, in what is reported to be the largest fine imposed on the technology giant.
The ruling, delivered on Wednesday, October 21, followed a two-week trial earlier this year in which a jury found that Meta had repeatedly misled the public about its data practices and the enforcement of its policies against harmful content.
Judge Francis Mathew said the company’s misrepresentations were deliberate and had continued for more than a decade, between 2010 and 2021.
“The lies extend beyond Facebook’s data practices as well,” the judge said, adding that they went to “the heart of Facebook’s core business practices”.
The lawsuit was brought by New Mexico authorities over allegations that Meta made misleading statements about whether third parties could access users’ personal information without their consent.
The case was linked to the Cambridge Analytica scandal, in which personal information from millions of Facebook users was exploited for political consulting, including work connected to the 2016 United States presidential election.
Prosecutors also accused Meta of misleading the public about how it benefited from content containing hate speech and how its rules against such content were enforced. The jury found that the company had intentionally misled the public on those issues as well.
According to the state’s lawyers, Meta’s conduct affected New Mexico’s entire population of approximately two million people. The jury found that the company had violated state laws more than 40 million times.
Although the total penalties calculated against Meta based on thousands of violations reportedly reached $219 billion, Judge Mathew reduced the amount to $25 billion.
New Mexico Attorney General Raúl Torrez welcomed the decision, saying it demonstrated that major technology companies could be held accountable for their actions.
“For too long, powerful technology companies have operated as though their size and influence put them beyond the reach of the law,” he said. “Today’s result makes clear that no corporation is too powerful to be held accountable.”
Meta, however, rejected the ruling and vowed to appeal.
The company’s chief lawyer, CJ Mahoney, argued that the decision would make it “all but impossible to do business in the state of New Mexico”.
He also accused the lawsuit of seeking to restrict online expression under the guise of enforcing new rules governing what users can say on digital platforms.
The latest penalty adds to Meta’s growing legal challenges over privacy and child safety. The company previously faced a $5 billion fine from the US Federal Trade Commission in 2019 over its data privacy practices and has encountered further legal action concerning the safety of its platforms for children.
Despite the legal pressure, Meta continues to invest heavily in artificial intelligence as it competes with other major technology companies.
The company expects to spend at least $135 billion on investments, largely related to AI, this year, with expenditure potentially reaching $145 billion.
During a call with financial analysts, Meta chief executive Mark Zuckerberg said the company’s AI tool, Muse, was already being used by 10 million people, describing its expansion as central to the company’s strategy.
Meta reported revenue of $64.5 billion for July to September, representing a 26 per cent increase compared with the same period a year earlier. Its profits also tripled to $9.8 billion.
However, the scale of its planned investments has placed pressure on its cash position. A review of the company’s financial documents by the BBC indicated that Meta recorded negative cash flow exceeding $2 billion, apparently the first such occurrence since it became publicly listed 14 years ago.
The company has also announced plans for a stock split involving a new class of non-voting shares, with Chief Financial Officer Susan Li pointing to the need for greater funding flexibility as AI-related costs continue to rise.
The New Mexico ruling now leaves Meta facing a potentially costly legal battle as it seeks to overturn the penalty while pursuing an expensive expansion into artificial intelligence.
