Meta Platforms has a strong chance of getting its $25 billion penalty in New Mexico reduced on appeal, legal experts say, as questions emerge over how the state calculated the number of consumer protection violations committed by the technology company.
The judgment, one of the largest state-level verdicts against a company in United States history, followed a jury finding that Meta misled consumers about access to their personal data and its handling of content on Facebook.
The company is expected to challenge both the jury’s verdict and the penalty imposed by Judge Francis Mathew.
Legal experts say Meta’s strongest argument may centre on whether the state could count a statement as a separate violation even when there was no evidence that a particular consumer had seen it or relied on it.
New Mexico law permits penalties of up to $5,000 for each violation. The jury’s calculations produced more than 43 million alleged violations, exposing Meta to a potential penalty exceeding $219 billion before the judge reduced the amount to $25 billion.
“The most vulnerable basis on appeal is going to be the question about whether a violation is going to count, even in the absence of any proof that a particular person saw one of these misrepresentations or relied on them to their detriment,” Peter Ormerod, a law professor at Villanova University, said.
Meta’s chief legal officer, C.J. Mahoney, said the company was confident it would prevail on appeal.
Meta has consistently denied selling users’ personal data and argued that New Mexico failed to prove that consumers were actually misled. It has also maintained that a penalty running into billions of dollars could violate its constitutional rights to due process and protection against excessive fines.
New Mexico Attorney General Raúl Torrez said on Wednesday that he expected Meta to appeal and that the state was prepared to defend its legal position.
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The dispute stems from a lawsuit filed by the state’s attorney general in 2021, alleging that Meta misled Facebook users about who could access their data, how it addressed hate speech and misinformation, and other company policies.
On September 25, jurors found that 26 of 29 statements made by Meta and its leadership on the issues were misleading. The jury then calculated violations by multiplying the statements by their potential audience in New Mexico.
The state had 1.4 million active Facebook users and a population of 2.1 million as of 2020.
In his ruling on Wednesday, Mathew said the state’s law could justify a penalty exceeding $219 billion but reduced the amount to $25 billion. New Mexico had sought between $35 billion and $40 billion, while Meta argued that a penalty of no more than $3.45 billion was justified.
Even if Meta loses its appeals in state courts, it could take its constitutional arguments to the US Supreme Court, Ormerod said.
However, the size of the penalty alone does not guarantee that it will be overturned, according to Daryl Lim, a professor at Penn State Dickinson Law. He noted that New Mexico law allows penalties to be imposed for each wilful violation.
Eric Goldman, a professor at Santa Clara University School of Law, questioned whether the calculations fairly reflected the harm caused by Meta, suggesting that the same conduct may have been counted repeatedly.
“It felt like there was a lot of duplicative counting in the calculations,” Goldman said, questioning how many times a single person could be considered deceived by the same company.
The appeal could therefore turn on whether courts accept New Mexico’s method of counting violations or conclude that the calculation produced an excessive penalty.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
