Why Meta has been ordered to pay a staggering $25bn

International

THE PRICE of Meta’s alleged failures over user privacy has reached $25bn (£18.6bn) in New Mexico, where a jury found the company repeatedly misled the public about Facebook users’ data and its content moderation practices.

Judge Francis Mathew issued the ruling on Wednesday following a two-week trial earlier this year. Meta, the parent company of Facebook, Instagram and WhatsApp, has vowed to appeal.

The judge found that the company’s misleading claims about how Facebook collected, controlled and shared personal information were deliberate and continued for more than a decade. The jury also found that Meta misled the public about its handling of hate speech and enforcement of content policies.

Meta’s head lawyer, CJ Mahoney, argued that the decision would severely restrict the company’s ability to operate in the state, describing it as “all but impossible to do business in the state of New Mexico”. He also maintained that the lawsuit threatened online expression.

The case stemmed partly from the Cambridge Analytica scandal, in which the political consulting firm obtained data from millions of Facebook users for political consultancy work, including activities connected to the 2016 US presidential election won by Donald Trump.

New Mexico’s lawyers argued that Meta’s conduct affected the state’s roughly two million residents. A jury found the company had violated state laws more than 40 million times, while communications involving senior executives, including chief executive Mark Zuckerberg, were described in the judge’s order as designed to mislead the public.

The state sought up to $40bn in penalties, but the judge reduced the calculated total of $219bn to $25bn. Meta had argued that any fine exceeding $3.4bn would be unconstitutional.

New Mexico Attorney General Raúl Torrez said the ruling showed that major technology companies could be held accountable, regardless of their size or influence.

The decision follows a $5bn US Federal Trade Commission fine against Meta in 2019 over data privacy.

The company has also faced separate legal action over child safety, including an almost $1bn fine in New Mexico and an $18bn settlement with California.

Meanwhile, Meta plans to spend at least $135bn on investments, mostly in artificial intelligence, this year, with spending potentially reaching $145bn. Revenue rose 26% year-on-year to $64.5bn in July to September, while profits tripled to $9.8bn.

Despite the growth, the company reported negative cash flow of more than $2bn, according to a BBC review of its financial documents. Chief financial officer Susan Li also announced a new class of non-voting shares, citing the potential need for greater funding flexibility as AI costs continue to rise.(MyTVCebu)