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CNET News: Will Meta’s $25 Billion Court Loss Change Its Ways?
Meta was hit with a $25 billion penalty on Wednesday when a judge in New Mexico found the company had misled users about data privacy practices. The decision marks one of the steepest corporate payouts ever levied against a technology company.
Under the ruling, Meta, which owns Facebook, Instagram and other platforms and services, was ordered to pay the fee for misleading social media consumers about their data privacy in a case dating back to Cambridge Analytica’s privacy violations involving the 2016 presidential election. The ruling against Meta imposed civil penalties for violating New Mexico’s Unfair Practices Act after a jury trial found Facebook liable for nearly 44 million violations of that law.
In CNET’s coverage of this topic in their article, “Will Meta’s $25 Billion Court Loss Change Its Ways?,” Michael Stokes, Veilant’s SVP of Emerging Technologies, provides his input:
Unbowed and unbothered?
Assuming the verdict in New Mexico stands, Meta may pay a large penalty. But it’s unlikely that the case will directly impact its newer business ventures other than serving as a lesson on how not to treat user data on Facebook. The New Mexico case still hasn’t determined what changes, if any, Meta will need to make to comply with the state’s privacy laws and whether that will be a bigger hit to the company than a $25 billion payout.
“What changes a company is a court order that dictates how the product has to work, with someone independent checking,” said Michael Stokes, senior vice president of emerging technologies at Veilant, a data security software and technology company.
For Meta’s newer technologies, including AI and AI-assisted hardware, the ruling would have little impact.
“Settlements written for 2018 don’t cover those devices,” Stokes said.
Will Facebook users get a cut of $25 billion?
Meta could continue to pay out billions of dollars in additional cases involving privacy and the effects of its platform design on younger users. Cases are pending in Washington, DC, Florida and Texas, among other places, covering issues such as more Cambridge Analytica fallout and WhatsApp privacy.
For this new verdict, users shouldn’t expect another payout; the money will go to New Mexico’s public school fund.
The sum may sound huge, and in education, it could go a long way, but Stokes said it won’t destroy Meta’s business.
“Meta’s stock went up the day the judgment went down,” he said. “That tells you how the market sees a fine on its own.”
Still, a judgment against the company that could lead to even more litigation can’t be good for Meta. It’s not alone. Many other tech companies, from Google to OpenAI to Snap, are facing similar lawsuits over how they collect or use data.
“The question in every case is the same: Do a company’s privacy and safety promises match how the product works?” Stokes said. “Any company making those promises should expect to be tested on them.”