Judge Cuts Meta's Cambridge Analytica Penalty From $219.5 Billion to $25 Billion in New Mexico Case

A New Mexico court on Wednesday ordered Meta to pay $25 billion in penalties stemming from a data privacy case tied to the company's Cambridge Analytica scandal, according to a court filing reported by CNBC. CNBC said the Wednesday filing showed the state was awarded $219.5 billion, but that the penalty was ultimately reduced to $25 billion by New Mexico district court judge Francis Mathew.

How the Penalty Was Calculated

The case traces back to a Santa Fe jury verdict in September, when jurors found Facebook liable for more than 43 million violations of New Mexico's Unfair Practices Act, according to CNBC and Fortune. The New Mexico Attorney General's office put the exact count at 43,899,725 violations, tied to false and misleading statements about how the company collected, protected, shared and used consumers' personal information, according to a statement from the office circulated on social media.

Jurors reviewed 29 statements made by Meta and its executives and found 26 of them misleading, Yahoo Finance reported. Attorneys representing the state had asked the judge to apply the statutory maximum of $5,000 per violation, Fortune reported. Multiplying the 43,899,725 violations by that $5,000 maximum produces roughly $219.5 billion (43,899,725 × $5,000 = $219,498,625,000), consistent with the pre-reduction award described in the filing; this is our calculation from the violation count and statutory cap cited in the reporting, not a separately reported figure.

In Wednesday's filing, Judge Mathew set the penalty at $25 billion, with interest accruing at 15% per year until the fine is paid in full, CNBC reported.

The Judge's Reasoning

Judge Mathew justified applying the maximum per-violation penalty by pointing to the scale and nature of the conduct. "The extraordinary number of willful violations found by the jury, the duration and repetition of the conduct, the breadth of subjects on which violations occurred, the involvement of senior Facebook leadership, the size of New Mexico audiences reached, and the clear intentional and systematic nature of Facebook's repeated misstatements established in the trial record support the highest level of penalty allowed by the New Mexico Unfair Practices Act - $5,000 per violation found by the jury," Mathew wrote in the filing, according to CNBC.

The judge also wrote that "Facebook did not conduct the comprehensive investigation that it promised" after the Cambridge Analytica revelations, characterizing the company's internal examination as "willfully ineffective," CNBC reported, citing the filing.

Meta's Response and Case Background

CNBC said it had reached out to Meta for comment on the penalty order. After the September verdict, Meta spokesperson Alex Burgos said in an email, "We disagree with the verdict and will continue to defend ourselves against efforts to distort our record," according to Fortune. At trial, Meta argued the state had not proved consumers were actually misled and said it does not sell user data, Yahoo Finance reported, while lawyers for the company told jurors in closing arguments that the state's evidence was outdated, per Fortune. In a separate New Mexico child-safety case, Meta said it disagreed with the ruling and planned to appeal, CNBC reported; that is the only stated appeal posture reflected in the available reporting.

New Mexico pursued the Cambridge Analytica claims on its own after declining to join an August multistate child-safety settlement that released Meta from future Cambridge Analytica liability, according to CNBC and Fortune. Accounts of that settlement's size differ: CNBC described it as nearly $17 billion, while Fortune reported Meta agreed to pay up to $18 billion. The lawsuit was filed in 2021 by former Attorney General Hector Balderas and tried under current Attorney General Raúl Torrez, CNBC reported. Meta separately paid $725 million in 2022 to settle a class action arising from the same 2018 scandal, in which personal information from as many as 87 million Facebook users was obtained through a third-party app without consent, according to CNBC and Yahoo Finance.

Bottom line: based on the figures in the reported filing, the final award is $194.5 billion below the $219.5 billion shown before reduction ($219.5B − $25B = $194.5B, or about 88.6% lower: ($219.5 − $25) / $219.5 × 100). Torrez said after the verdict that money awarded will go into a fund for the state's education system and that the state is also seeking an injunction against similar practices, Fortune reported. Whether a penalty of this size alters Meta's conduct remains a matter of interpretation; before the ruling, Villanova University associate law professor Peter Ormerod told Fortune, "It's unlikely that this is going to be the case that effectively penalizes the company in a meaningful way."