New Mexico Seeks Up to $40 Billion in Penalties Against Meta (META) Over Cambridge Analytica Data Breach

TLDR

• New Mexico is requesting a judge impose fines between $35 billion and $40 billion on Meta Platforms.
• The lawsuit originates from the Cambridge Analytica data breach, which affected up to 87 million Facebook users whose information was collected without permission.
• Jurors determined that 26 out of 29 company statements were deceptive, representing over 43 million state consumer law violations.
• Meta is pushing for a penalty ceiling of $3.45 billion, arguing the state’s demand violates constitutional protections.
• A ruling from Judge Francis Mathew is anticipated before the end of this month.

Shares of Meta Platforms (META) stock climbed 0.10% on Thursday as the tech giant’s privacy dispute with New Mexico advanced to a critical phase. State prosecutors formally requested that a judge impose penalties ranging from $35 billion to $40 billion against the social media company.

Meta Platforms, Inc., META

The penalty petition was presented during proceedings in Santa Fe. The hearing follows a jury decision delivered on September 25.

In that verdict, jurors concluded that Meta deceived Facebook users regarding data handling practices. The decision also addressed the company’s approach to managing hate speech and false information across its platform.

The litigation stems from the Cambridge Analytica controversy. The British consulting firm, which provided services to Donald Trump’s 2016 presidential campaign, extracted personal information from approximately 87 million Facebook users via a third-party application, all without obtaining user permission.

Jury’s Determination

The jury examined 29 separate statements issued by Meta and its executives. Their assessment determined that 26 of those statements contained misleading information.

This conclusion translated to over 43 million infractions of New Mexico’s consumer protection statutes. The count reflects the number of Facebook users or New Mexico residents who were exposed to each deceptive statement.

Meta’s legal team contended during the trial that these statements were selectively chosen. They maintained that the company had previously acknowledged imperfections in its privacy and misinformation management.

Under state regulations, the judge has authority to impose fines up to $5,000 for each violation. Randi McGinn, representing New Mexico, acknowledged that imposing the maximum amount could trigger constitutional due process issues.

Competing Legal Positions

McGinn instead proposed the $35 billion to $40 billion range. She explained this amount represents roughly 20% of the theoretical maximum penalty and would meaningfully impact Meta’s market valuation while remaining within constitutional boundaries.

“This court should speak to Meta in the only language it understands, which is money, and the value of its stock price,” McGinn told the judge.

Meta’s counsel, Matt Nicholson, vigorously opposed the proposal. He characterized the state’s demand as an “astronomical penalty” that would breach several constitutional safeguards.

Through legal submissions, Meta requested the judge limit any fine to $3.45 billion. The corporation insists it never engaged in selling user information and contends New Mexico hasn’t demonstrated that any consumers were genuinely deceived.

Judge Mathew delivered pointed remarks during proceedings. When Meta challenged the magnitude of the state’s request, he emphasized that choosing to proceed with a trial carries inherent risks.

“They have to accept the consequences of their decision to go to trial, do they not?” he said.

The complaint was originally filed in 2021. It alleged that Meta misrepresented who could access user information and how seriously the company addressed harmful material on its platform.

New Mexico’s case asserted that the company permitted hate speech and disinformation when such tolerance benefited its financial performance. This allegation formed a core element throughout the trial proceedings.

Judge Mathew indicated he plans to announce his decision on the penalty amount before month’s end. The precise financial impact on Meta will remain uncertain until that ruling.

The case is designated as State of New Mexico, et al., v. Meta Platforms, Inc., case number D-101-CV-2021-00132, in the First Judicial District Court of New Mexico.