Meta On Wednesday, a court in New Mexico ruled that the company must pay a fine of $25 billion, due to this data privacy case stemming from Cambridge Analytica's scandal nearly a decade ago.
This fine was disclosed in a court document. Previously, in September, a jury at a court in Santa Fe determined that this social media giant had misled residents of the state regarding how to protect and collect user data, as well as how to prevent harmful information from spreading on its platform, and therefore should bear responsibility.
Although the jury determined that Meta violated the state's unfair business practices law over 43 million times, with each violation subject to a maximum civil fine of $5,000, the final amount of the fine was determined by a judge in New Mexico. Documents submitted on Wednesday showed that the state was initially awarded a penalty of $219.5 billion, but the final fine was reduced to $25 billion.
New Mexico District Court Judge Francis Mathew wrote in the document:
The exceptionally large number of intentional violations identified by the jury, the duration and repetition of such behaviors, the wide range of subjects involved in the violations, the participation of high-level Facebook leadership, the scale of the New Mexico audience affected, and the deliberate and systematic nature of the misleading statements repeatedly made by Facebook as clearly shown in the trial records, all support the application of the maximum fine permitted under New Mexico's Unfair Business Practices Act: a fine of $5,000 for each violation.
The judge added that the fine will accrue interest at an annual rate of 15% until it is fully paid off.
CNBC has contacted Meta to seek a comment regarding this fine ruling.
Meta has previously reached settlements regarding privacy lawsuits nationwide that originated from Cambridge Analytica, including a settlement of nearly $17 billion in August with a group of state attorneys general in another federal case related to child safety and mental health. However, since New Mexico did not join this settlement, the data privacy case in the state that stemmed from the Meta Cambridge Analytica scandal is still proceeding to trial in September.
In 2022, this social media giant agreed to pay $725 million to settle a class action lawsuit that also stemmed from the company's Cambridge Analytica scandal. The scandal began in 2018 and had already dealt a heavy blow to the company, which was then led by Mark Zuckerberg, before the company officially changed its name to Meta. At the heart of the controversy was the political consulting firm Cambridge Analytica being accused of improperly obtaining information on 87 million users, which raised questions about Facebook's data handling practices.
Mathew The judge stated in the document that after the Cambridge Analytica incident was exposed, Facebook 'did not conduct the comprehensive investigation they promised to carry out.'
The document states that 'top executives' demanding cost cuts, insufficient law enforcement resources, inadequate investigation methods, and a reluctance to set a precedent for future investigations, all contributed to the internal investigation of Facebook being described by the judge as 'intentionally ineffective'.
The former Attorney General of New Mexico, Hector Balderas, initially filed this lawsuit related to Cambridge Analytica in 2021, while the current Attorney General, Ra, and Torrez, were responsible for the subsequent trials.
Torrez also presided over another child safety-related trial in that state against Meta. In that case, in March, the jury ruled that the social media company should pay $375 million for violating the state's Unfair Business Practices Act. Subsequently, a judge in New Mexico ordered Meta to pay $567 million to a relief fund in the second phase of the case, on the grounds that the company's actions caused public nuisance.
Meta indicates disagreement with this ruling in New Mexico and plans to appeal.
