New Mexico seeks up to US$40 billion penalty from Meta over Facebook privacy claims

New Mexico has asked a judge to order Meta Platforms to pay between US$35 billion and US$40 billion in civil penalties after a jury found that Facebook misled consumers about its data privacy practices.

The request was made at a hearing on Thursday (1 October) before Judge Francis Mathew of the First Judicial District Court in Santa Fe. The judge is responsible for determining the financial penalty following the jury's verdict last week.

The case, brought by the New Mexico Department of Justice, concerns Facebook's handling of users' personal information, as well as statements the company made about misinformation and hate speech on its platform. The state said the case stemmed in part from the Cambridge Analytica scandal.

Jury found more than 43 million violations

On 25 September, a jury found that Facebook had committed 43,899,725 violations of New Mexico's Unfair Practices Act through false or misleading statements to consumers.

The New Mexico Department of Justice said the statements concerned how Facebook collected, protected, shared and used personal information, as well as the company's stated efforts to address misinformation and hate speech.

The jury found 26 of 29 statements examined during the trial to be misleading, according to the state's lawyers. The statements covered several areas, including users' ability to control their data, Facebook's handling of third-party applications and its enforcement of content policies.

New Mexico's Unfair Practices Act allows civil penalties of up to US$5,000 per violation. Applying the maximum amount to all the violations could produce a penalty of more than US$200 billion.

Cited by the Reuters, the state has instead proposed US$35 billion to US$40 billion, arguing that a lower figure would address constitutional due-process requirements while still imposing a substantial penalty.

Meta challenges proposed penalty

Meta's lawyers argued that the amount sought by New Mexico was excessive and did not correspond to the conduct examined during the trial.

In court filings, Meta proposed capping the penalty at approximately US$3.45 billion. The company argued that the jury's findings did not establish that Facebook sold users' data or that individual consumers had actually been misled.

Meta also disputed the state's characterisation of statements presented during the trial, arguing that they had been taken out of context.

At Thursday's hearing, Meta lawyer Matthew Nicholson described the state's proposed penalty as an “astronomical penalty” and argued that it would violate constitutional protections concerning excessive fines.

New Mexico lawyer Randi McGinn argued that the proposed US$35 billion to US$40 billion figure would represent roughly 20 per cent of the potential penalties arising from the jury's findings.

Judge Mathew did not issue a ruling at the hearing. Local reporting said he expects to decide the penalty within two to three weeks.

Case linked to Cambridge Analytica scandal

The New Mexico lawsuit was filed in 2021, following revelations about Cambridge Analytica, a British political consulting company that obtained Facebook user information through a third-party application.

The scandal involved data from as many as 87 million Facebook users, according to previous investigations. The information was obtained without users' informed consent and became the subject of international scrutiny over Facebook's privacy practices.

New Mexico's case went further than the Cambridge Analytica data incident itself. The state also challenged Facebook's representations about misinformation, hate speech, enforcement of its community standards and its handling of third-party access to user information.

New Mexico was among the states that pursued its own litigation rather than joining a broader settlement involving Meta over the Cambridge Analytica-related claims.

New Mexico has other Meta litigation

The latest case is separate from another New Mexico lawsuit involving Meta's treatment of minors on its platforms.

The state's courts have also issued findings in litigation concerning allegations that Meta's platforms created a public nuisance and failed to adequately protect children. The New Mexico courts' official case records list the separate proceedings alongside the consumer-protection case.

The financial penalty in the latest case remains undecided. Judge Mathew is expected to issue his ruling later in October. The case is State of New Mexico, et al. v. Meta Platforms, Inc., D-101-CV-2021-00132, before the First Judicial District Court in Santa Fe.