A civil jury has found Meta liable for violating New Mexico’s Unfair Practices Act, and now the judge is being asked to order the company to pay between $35 billion and $40 billion.
At a hearing on October 1 in Santa Fe, special prosecutor Randi McGinn asked Judge Francis Mathew of the First Judicial District Court to order Meta to pay this amount, while a lawyer for the social media giant said such a penalty would be “an astronomical” one, violating “a host of constitutional provisions.”
Meta is being punished for making false statements about user privacy, and also for not removing “hate speech” and “misinformation” fast enough.
The verdict was delivered on September 25, finding Meta had made 26 false or misleading statements, resulting in nearly 43.9 million violations of the state’s Unfair Practices Act.
This would translate to a maximum of $5,000 per violation, or $219 billion in all – more than the $206 billion the tobacco industry had to pay in a settlement in 1998. The state asked for about 20% of this amount.
The number of violations was arrived at by counting the number of people in New Mexico, and the number of Facebook users in the state, and then multiplying these numbers by the number of times Meta made false statements in news outlets and on its own platforms.
The state had to show only that harm was likely, not that it actually occurred.
Meta is being punished for lying about how it handled user data, and the Cambridge Analytica scandal that saw a third party harvest data from about 87 million profiles. The company is also being punished for not removing “hate speech” and “misinformation” fast enough – and the number of violations in this category is about a quarter of the total.
The New Mexico case is not the only one where Meta is being forced to pay up – in March, a Santa Fe jury ordered it to pay $375 million in a case involving child safety on Facebook and Instagram, and in August, the judge in that case added another $567 million for a youth mental health fund.
In August, 47 states reached a settlement with Meta, along with other social media companies, that will see them pay $17 billion. Judge Mathew mentioned this during the October 1 hearing, saying that due process suggests he should opt for a much lower amount than what the state of New Mexico is asking for.
During the hearing, Meta’s lawyer Matt Nicholson described the case as “about 26 statements over 11 years” and said that the state “made absolutely no showing that anyone in the state of New Mexico ever saw them, relied on them or were harmed by them in any way.”
McGinn countered that “the one thing you didn’t hear from counsel is an apology.”
In its filing, Meta asked the judge to cap the fine at $3.45 billion.
After the September 25 verdict, a Meta spokesperson said that the company has “a First Amendment right to manage those platforms in a way we believe best serves the interests of our community.”
The essence of the case is that Meta lied about how it was managing its platforms, and that is what the $35-40 billion is supposed to punish – if the judge agrees.
However, it’s hard to see how fining a company for not removing “hate speech” and “misinformation” fast enough can be in line with the First Amendment. In fact, this looks like a way for state attorneys general to put pressure on social platforms to remove more speech – and the fact that the penalty is calculated by multiplying the number of violations by the number of people in a state means that this gives them a powerful lever to keep using.
As for the verdict, it’s clear that a huge portion of it is for lying about privacy, and the Cambridge Analytica scandal. But about a quarter of the violations are over “hate speech” and “misinformation” – and this is what the state is demanding Meta pay for as well.
In other words, a state is fining a platform for not removing speech fast enough – and this is a dangerous precedent.
