THE NEW YORK TIMES: Meta ordered to pay $35 billion for deceiving users on privacy

SAN FRANCISCO — A New Mexico judge on Wednesday ordered Meta to pay US$25 billion (A$35bn) for deceiving users about its data privacy practices, one of the largest penalties levied against a tech giant.

New Mexico sued Meta in 2021 over a scandal involving political consulting firm Cambridge Analytica, saying the social media company had misled users with its public statements about their data privacy. Last month, after a two-week trial, a jury in state District Court in Santa Fe ruled against Meta, saying the company had committed 43 million violations of New Mexico’s consumer protection laws. Each violation carried a penalty of up to US$5,000 (A$7,000).

On Wednesday, Judge Francis J. Mathew of state District Court in Santa Fe issued the landmark penalty.

The move was another blow to Meta, which owns Facebook, Instagram and WhatsApp, as it has racked up court losses over the harms that its social media platforms have caused users. States and consumers have filed thousands of lawsuits over issues such as how Facebook and Instagram endangered child safety, led to social media addiction, used people’s data without their consent and infringed on their privacy.

New Mexico has been leading the charge against Meta, and winning. In August, a New Mexico judge ordered the company to pay US$567 million (A$807m) in damages after a jury ruled the company had enabled harm to young users, on top of a US$375 million (A$533m) penalty from the same case in March.

In both cases, New Mexico accused Meta of violating state consumer protection laws, which have emerged as an unlikely and effective way to litigate tech companies that have been previously shielded by laws that protect free speech, said Vincent Joralemon, director of the Life Sciences Law and Policy Center at the Berkeley Center for Law and Technology.

“The takeaway from this will be that consumer protection laws will be the way to hold tech companies accountable,” Joralemon said, adding that the penalty could inspire other states to pursue similar lawsuits.

In August, Meta reached a landmark settlement with 47 states, the District of Columbia and U.S. territories, agreeing to pay up to US$17.1 billion (A$24bn) in penalties and make major changes to its products over claims that it endangered children with addictive social media platforms. As part of that settlement, Meta agreed to pay US$459 million (A$653) to settle similar privacy claims regarding Cambridge Analytica, meaning other states are unlikely to pursue the charges that New Mexico did.

Meta did not immediately respond to a request for comment.

The data privacy case in New Mexico was in some ways a throwback to an earlier tech era, when social media — and not artificial intelligence — was in the spotlight. In 2018, The New York Times and other publications reported that British firm Cambridge Analytica had acquired the private data of tens of millions of Facebook users without their knowledge to build profiles of American voters.

The revelations set off an outcry over how Facebook was harvesting people’s information and treating their privacy. Facebook, like many social media platforms, is offered as a free digital service, but users provide their information to the sites and are targeted with ads. Meta CEO Mark Zuckerberg appeared in Congress to testify on his company’s handling of data.

This article originally appeared in The New York Times.

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