Invest1 publisher2 min readPublished
New Mexico jury finds 26 of Meta's 29 Facebook promises deceptive
Meta lost a second New Mexico consumer-protection jury trial this year, on findings the state's lawyer counts as 43.9 million violations worth up to $5,000 each. A judge sets the penalty next, and that same lawyer expects Meta's appeal to hold back any cash for four or five years.
The Investor · Invest desk
What happened
- For the second time this year, a New Mexico jury found Meta broke state consumer law, this time over promises to protect Facebook users from harmful content and data misuse.
- After two weeks of testimony in Santa Fe, jurors found 26 of the 29 Meta statements they weighed false or deceptive under the Unfair Practices Act.
- Jurors also found five unconscionable practices, including failing to tell users that a third-party app developer had accessed their data.
- State lead attorney Randi McGinn estimates 43,899,720 separate violations, each carrying a maximum penalty of $5,000.
- Judge Francis Mathew will set what Meta pays after hearings at which both sides argue the judgment.
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Why it matters
- cost Each $100 per violation Judge Mathew assigns adds about $4.39 billion to what Meta owes, and each $1 adds about $43.9 million, so the rate he chooses decides whether this is a nuisance or a major charge.
- exposure Because the jury tied each statement to every Facebook user in the state, any other public pledge Meta made to New Mexicans can be multiplied into more than a million counts the same way.
- precedent Two jury wins against Meta in one year give New Mexico's Department of Justice and its outside counsel a tested route for taking platform-promise claims all the way to a verdict.
McGinn's count [7] breaks down into 31 findings, the 26 deceptive statements plus the five unconscionable practices [1], each multiplied by 1,416,120 users [2]. That is slightly above the jury's floor of 1.4 million New Mexicans per statement [5]. At the Unfair Practices Act's maximum of $5,000 per violation [6], the total is $219.5 billion [3]. Spread across the state's Facebook users, it is $155,000 per person [4].
The $5,000 is a cap. Judge Mathew will hear argument from both sides before he fixes an amount [8].
The judgment can come in far below that cap in a few ways. Mathew could choose a rate near the bottom of the range. An appellate court could accept Meta's position, stated Friday, that "We have a First Amendment right to manage those platforms in a way we believe best serves the interests of our community" [10]. It could instead accept the argument from Meta's attorney, Dane Butswinkas, that the state's case rests on a data breach more than a decade old [13]. Or the award could survive and still arrive late. McGinn said Meta is almost certain to appeal, and "We aren't going to see the money for four or five years" [9].
In my view the counting unit matters more than the rate. The jury held that one statement reaches every Facebook user in the state [5]. Among the statements it found false was Mark Zuckerberg's May 2010 line in The Washington Post: "We do not and never will sell any of your information to anyone" [12]. An op-ed from 2010, counted against 2020 users, is how a single sentence becomes more than a million violations. The counter-case is that the per-user multiplication is the part an appeal would go after. Counted once per finding, 31 violations at $5,000 each top out at $155,000 [4].
McGinn was hired by the New Mexico Department of Justice to lead the case [15]. "My word to all the social media companies that would not be truthful to New Mexicans is like, 'Don't mess with New Mexico,'" she said [14]. Meta said it will continue "to defend ourselves against efforts to distort our record" [11]. That commits the company to years more litigation before any money changes hands [9]. Treating these promises as a liability priced per user stops making sense if Mathew, or an appellate court after him, throws out the per-user count.
What to watch
- Mathew's penalty hearings, where the state and Meta will argue over both the per-violation amount and how violations are counted.
- The grounds Meta cites when it appeals, and whether it contests the jury's finding that each statement reached at least 1.4 million users.
- Any penalty ruling from the earlier New Mexico jury verdict against Meta this year, the closest guide to how a court in the state prices these counts.