Cambridge Analytica: Meta Hit With Record $25 Billion Penalty in New Mexico

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Eight years on, Cambridge Analytica is costing Meta more than any settlement: A court in the U.S. state of New Mexico has just ordered the Facebook parent to pay a penalty of $25 billion. That is significantly more than the up to roughly $17 billion Meta agreed to pay dozens of other states in August to settle claims over its addictive platforms.

Nearly 44 Million Violations

At the heart of the case is the Cambridge Analytica scandal. Through a personality quiz app, data from about 87 million Facebook profiles was harvested and sold to the British political consulting firm, which used it for targeted political ads in the 2016 U.S. presidential campaign. New Mexico sued in 2021, accusing Facebook of misleading users for years about how it handled their data. Statements about its handling of misinformation and hate speech were also part of the lawsuit.

In September, a jury had already found Meta liable for 43,899,725 violations of the state’s consumer protection law, according to the New Mexico Department of Justice. Prosecutors said the company made 26 misleading statements about data privacy over 11 years. Judge Francis Mathew has now set the amount of the penalty. “These communications were part of a coherent strategy designed to mislead the public,” he wrote, according to CBS News. The state had sought up to $40 billion. Until the penalty is paid, it accrues interest of 15 percent a year, according to the local newspaper The Santa Fe New Mexican.

“This is a historic day for New Mexico and for consumers across the country,” said Attorney General Raúl Torrez, adding that “no corporation is too powerful to be held accountable.” At the hearing, Meta’s lawyer Matthew Nicholson called the penalty “unconstitutional,” arguing that it would drive businesses out of the state. Meta is expected to appeal.

The Settlement in August

A comparison with August shows how unusual the ruling is. At the time, Meta settled in the middle of a trial in a federal court in California over addictive design and child safety on Facebook and Instagram. According to New York Attorney General Letitia James, who led a coalition of 51 attorneys general in total, Meta will pay at least $12.1 billion and up to $17.1 billion.

The differences are striking:

• Amount: The $25 billion for New Mexico is well above the total for all the other states combined, for a single state with about 2.1 million residents.
• Verdict vs. deal: In August, there was no finding of liability, and Meta continued to deny the allegations. In New Mexico, a jury has ruled, leaving Meta to pin its hopes on an appeal.
• Payment terms: The settlement is paid in installments over ten years, and nearly a third of it will flow only if TikTok and YouTube adopt similar rules and pay up themselves.
• Obligations: In August, Meta committed to age verification, a two-hour daily limit and a nighttime block for teenagers. The New Mexico ruling, for now, is purely a financial penalty.

New Mexico deliberately chose not to join the joint settlement and took its claims to trial instead. It is not Meta’s first defeat in the state: In an earlier trial over protecting minors from sexual predators, the company was ordered to pay nearly $1 billion there.

Five Times the F.T.C. Penalty

The amount also stands out historically. Meta already paid $5 billion to the Federal Trade Commission in 2019 over the Cambridge Analytica scandal, at the time the largest privacy penalty in U.S. history. The New Mexico penalty is five times as large. Mr. Torrez sees it as a warning to the entire tech industry, explicitly including social media and A.I. companies.