Washington: A judge on Wednesday ordered Meta to pay New Mexico $25 billion after a jury found the company liable for misleading users about privacy on Facebook, marking the biggest fine ever imposed on the tech giant.

In his ruling, State District Court Judge Francis J. Mathew said Facebook had deliberately misled users, with executives consistently misrepresenting how the platform operated.

"Facebook promised users that they (the users) controlled their data. This was false," he said.

New Mexico Attorney General Raul Torrez said the award should serve as a warning to technology companies that the state would hold them accountable for their actions.

"This judgment should be a signal, an unambiguous message, to Silicon Valley," he said.

Meta, which had previously announced plans to appeal the September verdict, did not immediately respond to a request for comment on the amount. The California-based company, headquartered in Menlo Park, was scheduled to announce its quarterly earnings on Wednesday afternoon. Its shares were trading 2 per cent higher following the announcement of the penalty.

New Mexico pursues separate case against Meta

In August, Meta reached a settlement with nearly all US states and territories, excluding New Mexico and Florida, agreeing to pay $18 billion and introduce stronger child-safety measures on Facebook and Instagram.

The settlement brought an end to a trial concerning teenage social media addiction and resolved a long-running case seeking to hold the company accountable for the impact of its platforms on children's mental health. The lawsuit focused on features allegedly designed to capture and retain young users' attention.

New Mexico did not join the multistate settlement because it was pursuing a separate case against Meta.

In September, a jury found the company liable for more than 43 million violations of New Mexico's consumer protection laws. The case centred on allegations that Facebook misled users about privacy following the Cambridge Analytica scandal, in which a political consulting firm harvested Facebook user data to create targeted political advertisements for the 2016 US presidential election.

Attorneys representing New Mexico had sought between $35 billion and $40 billion, arguing that only a substantial financial penalty capable of affecting Meta's stock price would force the company to change its practices.

Meta's lawyers, meanwhile, argued that the penalty should not exceed $3.4 billion. They maintained that an award 10 times that amount or more would violate due process, be unconstitutional and fail to withstand an appeal.

Meta disputed the state's claims, arguing that prosecutors had not demonstrated that the company made misleading statements about privacy. It also contested allegations concerning its content moderation practices. Interest on the penalty would accrue while the appeal proceeds, although the number of violations attributed to Meta could be reduced.

During court proceedings, Meta attorney Matt Nicholson argued that a penalty approaching $40 billion would be "shocking to the conscience". Randi McGinn, an attorney representing New Mexico, urged the court to stand up to "tech titans who think they are bulletproof and can do whatever they want."

The award substantially exceeds the $5 billion fine imposed on Facebook by the Federal Trade Commission in 2019.

Under New Mexico's Constitution, fines collected for violations of consumer protection laws are directed towards state education spending. Torrez acknowledged that the money would remain tied up while Meta pursued its appeal.

State alleges Meta misled users about data breach

The state's case centred on allegations that Facebook deceived users about a data breach involving a third-party personality quiz. The quiz harvested information from approximately 87 million profiles and sold it to Cambridge Analytica, which used the data to develop targeted advertisements. The now-defunct firm's clients included Donald Trump's 2016 presidential campaign.

New Mexico's attorneys argued that Facebook's public statements about privacy had misled the state's entire population, not merely those who used the platform.

Meta's lawyers countered that prosecutors had failed to establish whether anyone had suffered actual harm as a result of the company's statements.

"The jury didn't make findings that any New Mexican heard or saw these statements, or was harmed by them," Nicholson said during an October 1 hearing.

Prosecutors also accused Facebook of allowing misinformation and violent content to spread on its platform. Meta's defence team strongly rejected those allegations, maintaining that the company's content moderation policies were robust and that freedom of speech had to be taken into account.

Jury identifies more than 43 million violations

New Mexico was the only state to take the Cambridge Analytica privacy scandal to trial after 48 other states agreed to the $18 billion settlement in August. Florida was the only other state, besides New Mexico, that did not join the agreement, which included a release of Meta from future liability relating to the Cambridge Analytica breach.

During the trial, jurors examined whether Facebook had misled users about privacy and content moderation on 34 separate occasions. State prosecutors argued that the company's statements had deceived the wider population of New Mexico, including people who did not use social media.

The jury accepted this argument and found 2.1 million violations on certain counts, taking the overall tally to more than 43 million.

In subsequent court filings, Meta's lawyers challenged the state's interpretation of its consumer protection laws, arguing that the legislation did not apply to people who were not using Facebook at the time.

Following the verdict, Torrez said the entire award would go towards a fund for the state's education system. New Mexico is also seeking an injunction to prevent the company from engaging in similar practices in the future.

Meta challenges evidence and violation count

As Meta appeals the jury's verdict, the number of violations attributed to the company could be reduced, potentially lowering the financial penalty.

The company's lawyers have challenged the state's method of calculating violations, arguing that prosecutors had counted individuals who might have encountered the allegedly misleading statements without establishing that those statements had caused harm.

During closing arguments, Meta's attorneys described the state's evidence as outdated, arguing that despite having five years to gather material, prosecutors had identified only one other instance of a data breach.

In one of the few findings in Meta's favour, jurors concluded that the state had not proved Facebook made false claims about removing harmful content, including misinformation concerning the COVID-19 pandemic.

New Mexico maintained that Facebook had favoured certain accounts and allowed violent or inaccurate content to spread. In her closing argument, state attorney Randi McGinn alleged that the company had profited from harmful content, a claim CEO Mark Zuckerberg denied during his video deposition.

Zuckerberg said the company had to strike a careful balance between freedom of speech and content moderation.

Meta's lawyers also argued that the company had changed its policies since the lawsuit was filed in 2021 and removed 99 per cent of content that violated its standards. (AP)