Folks, I almost spilled my coffee reading this one. A New Mexico judge just ordered Meta to pay a whopping $25 billion after the company was found to have misled users about its privacy practices in a case related to the Cambridge Analytica scandal. I mean, that’s a big number, even for a tech giant like Meta. The Wednesday ruling marks one of the largest-ever legal penalties for a tech giant, and it’s just the latest court loss for Meta this year.
The company, then known as Facebook, disclosed in 2018 that the private information of as many as 87 million Facebook users was improperly obtained by political analytics firm Cambridge Analytica. The firm used that information to build profiles of American voters. You can’t make this stuff up, right? New Mexico sued Facebook in 2021, accusing it of mishandling state residents’ personal information and deceiving those users about its policies in connection with the incident.
A jury found in September that Meta had violated the state’s Unfair Practices Act more than 43 million times. State District Court Judge Francis Mathew criticized the company for what he described as a “coherent strategy designed to mislead the public” in his Wednesday penalty decision. “Facebook’s misrepresentations about users’ control of their data were not isolated incidents, but rather a systematic pattern of deception at the core of Facebook’s business model,” Mathew wrote. Bless their hearts, it seems like Meta has some ‘splainin’ to do.
After Wednesday’s penalty decision, Meta said it will appeal the decision and has accused New Mexico’s attorney general of conflating privacy and speech issues. Meta Chief Legal Officer C.J. Mahoney said in a statement, “This ruling, and the Attorney General’s approach to this enforcement, makes it all but impossible to do business in the state of New Mexico… At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online. We are confident we will prevail on appeal.” Yeah, good luck with that, Meta.
Meta’s legal battles threaten to strain its business, though court penalties and settlements remain relatively small compared to the company’s earnings so far. The company reported earnings for the quarter ended in September on Wednesday, including lower quarterly profits than Wall Street had expected. It attributed the miss to a charge from the $18 billion multistate settlement it agreed to in August to resolve claims that its platforms have addicted and harmed young people.
New Mexico was not a party to that settlement, which also resolved the participating states’ outstanding claims related to Cambridge Analytica. Meta posted income from operations of nearly $13 billion during the quarter, compared to nearly $23 billion that it said it would have earned without the settlement. Somewhere in Atlanta, a producer thought this sounded terrifying, I’m sure.
Meta CFO Susan Li said on a call with analysts following the earnings report that the company is monitoring “active legal and regulatory matters that could significantly impact our business and financial results,” including additional youth-related trials set for later this year and next. Meta was also ordered to pay nearly $1 billion in a separate New Mexico case earlier this year over claims that its platforms addicted and harmed young people.
The company’s business continues to grow at a strong clip thanks in large part to its investments in artificial intelligence. The company posted sales growth of 26% year-on-year to more than $64 billion in the quarter. Meta’s stock jumped more than 3% in after-hours trading following the report on Wednesday. The company launched its Muse AI personal assistant app in September, which quickly rocketed to the top of app stores and has gained more than 10 million users, according to the company.
In conclusion, it seems like Meta has a lot on its plate, between the $25 billion penalty and the various lawsuits and settlements. But hey, at least their stock is doing well, right? And who knows, maybe they’ll finally get their act together and start taking user privacy seriously. A guy can dream, anyway. As I finish my coffee, I’m left thinking, what’s next for Meta? Only time will tell, folks. 🙄
Armchair patriot. Believes in the free market, cold beer, and that there’s always a guy named George behind every CNN segment.
Former remote-throwing champion turned #1 couch commentator on liberal panic in the media. Born in Texas (or so his mug says), he earned a degree in Fake Newsology & Beer Philosophy from YouTube University.
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