Legal Action Against Meta
Since its inception, Facebook has maintained that users have control over their personal information. However, a recent ruling by a judge in New Mexico has led to Meta being ordered to pay a staggering $25 billion for misleading individuals regarding its privacy policies and content moderation practices. This fine marks the most significant penalty ever levied against the parent company of Facebook, Instagram, and WhatsApp.
The judicial decision, announced on 21st October, followed a jury’s determination in September that Meta had committed over 43 million violations of New Mexico’s consumer protection laws. Judge Francis Mathew concluded that the corporation had deceived its users about the functioning of its platform. The state’s Attorney General, Raúl Torrez, described this ruling as one of the largest fines imposed on a corporation by a single state in US history, stating during a press conference, “This judgement should serve as a signal, an unequivocal message to Silicon Valley.”
The Cambridge Analytica Connection
This case traces back to the Cambridge Analytica scandal that came to light in 2018, revealing that the British political consultancy had unlawfully obtained personal data from up to 87 million Facebook users without their consent. The data was collected through an application that invited users to fill out a personality quiz. Participants unwittingly granted access to certain aspects of their profiles, while the app also harvested information from their contacts, including individuals who had never taken the quiz.
Cambridge Analytica, which played a role in Donald Trump’s presidential campaign in 2016, utilised this personal data to create voter profiles and target political advertising to specific groups. Following the revelations, Facebook faced numerous investigations and scrutiny regarding third-party access to personal data. In 2021, New Mexico filed a lawsuit against the company, alleging that its public statements concerning privacy concealed how it collected, shared, and utilised user information.
False Promises of Privacy
The jury’s verdict, delivered on 25th September, indicated that Meta had made misleading claims about users’ control over their personal data, the access permitted to external applications, and the measures taken to investigate potential misuse of data. Judge Mathew highlighted that some of the misleading statements identified by the jury were made by senior executives, including Mark Zuckerberg and former Chief Operating Officer Sheryl Sandberg. These statements were deemed part of a coordinated strategy to mislead the public.
The judicial document also referenced an internal email in which Zuckerberg acknowledged that users likely did not understand their privacy settings. Instead of providing clear explanations regarding how these tools functioned, the company allegedly exploited this lack of understanding to encourage users to share more personal information.
Furthermore, the jury found certain declarations made by Facebook regarding its efforts to combat misinformation and hate speech, as well as its enforcement of policies across different users, to be deceptive.
Potential Financial Implications for Meta
New Mexico’s laws permit fines of up to $5,000 for each intentional violation of consumer protection laws. Had the maximum penalty been applied to the identified infringements, the total could have exceeded $219 billion. However, the judge opted to set the fine at $25 billion. Reports indicate that state attorneys had sought a penalty ranging from $35 billion to $40 billion, while Meta requested a reduction to approximately $3.45 billion. The company has announced its intention to appeal the decision, contesting both the number of violations and the size of the fine.
If the ruling stands, the funds are designated for New Mexico’s public education system, as mandated by the state constitution. Additionally, the judgement includes an annual interest rate of 15% on the outstanding amount. The court must also address a request from the state aimed at preventing the company from engaging in similar practices in the future.
Ongoing Legal Challenges for Meta
This case adds to a series of legal setbacks faced by Meta this year. In August, the company, led by Mark Zuckerberg, was ordered to pay $567 million after a New Mexico judge found that its platforms significantly contributed to mental health issues among children and adolescents. That same month, Meta reached a historic settlement of up to $18 billion to resolve lawsuits from 29 states, spearheaded by California, which accused the company of designing addictive features in Facebook and Instagram that harm child welfare.