Tech Reporter

Meta, the company behind Facebook, Instagram and WhatsApp, has been hit with its largest fine ever for its business practices.

A judge in New Mexico on Wednesday ordered the company to pay $25bn (R462bn) following a two-week trial earlier this year that found it had spent years lying to the public about how it handled Facebook user data.

“The lies extend beyond Facebook’s data practices as well,” the judge said, adding they went to “the heart of Facebook’s core business practices”.

The case stems from Meta’s role, then still trading as Facebook, in the Cambridge Analytica scandal, where data from millions of Facebook users was utilised for political consulting work, including around the 2016 US Presidential election.

New Mexico lawyers sued over statements by Meta executives that user data was never shared with third parties without permission. They argued the entire state population of roughly two million people was impacted. A jury found Meta had violated state laws more than 40 million times.

Judge Francis Mathew said the violations were “willful” and spanned more than 11 years, from 2010 to 2021, with communications between senior executives, including Mark Zuckerberg, “designed to mislead the public”. While the full penalty was calculated at $219bn, he reduced it to $25bn – roughly equal to Meta’s quarterly profit.

“For too long, powerful technology companies have operated as though their size and influence put them beyond the reach of the law,” New Mexico Attorney General Raúl Torrez said. “Today’s result makes clear that no corporation is too powerful to be held accountable.”

Meta’s head lawyer CJ Mahoney said the ruling made it “all but impossible to do business in the state of New Mexico” and the company intends to appeal.

“At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online,” Mahoney said.

The fine surpasses a $5bn penalty levied by the US Federal Trade Commission in 2019. It comes after New Mexico also fined Meta almost $1bn this year over child safety, with the judge comparing the company to an industrial polluter whose pollution was “the psychological harm and sexual exploitation of children.”

Despite the fines, Meta continues heavy AI spending, expecting to spend up to $145bn this year, even as it reported negative cash flow of more than $2bn for the first time since its listing.