Meta Deal Faces New Mexico-Sized Hole Linked to Cambridge Analytica

Nestled into Meta Platforms Inc.’s landmark settlement with US states over social media harms for kids was a seemingly unrelated agreement to resolve a privacy controversy that rocked Facebook after the 2016 presidential election.

The deal-within-a-deal nearly resolves Meta’s so-called Cambridge Analytica scandal — which has already cost the company about $6 billion — but not quite.

Under the latest settlement, Meta is paying almost half a billion dollars to 46 states and two US territories to release any future claims over a 2016 leak of data on tens of millions of Facebook users to Cambridge Analytica, a now-defunct political research firm. It used the data to help target voters for then-presidential candidate Donald Trump’s campaign.

There are at least two big holdouts: New Mexico and Washington, DC, both of which have suits pending over the data leak. New Mexico’s 2021 suit is super-charged with allegations that Facebook’s cultivation of user trust was a “charade” that was exposed by the Cambridge Analytica leak.

New Mexico’s suit is set to go to trial Sept. 8, putting the company at further risk even after Wednesday’s massive settlement largely resolved a wide range of legal claims that have dogged the company for years. New Mexico hasn’t said how much in damages it’s seeking in the new trial.

Meta declined to comment on the upcoming trial, but has denied wrongdoing.

The office of New Mexico Attorney General Raúl Torrez said the upcoming trial will cover a wide range of conduct, including Facebook’s alleged amplification of “harmful content and themes” that were pushed to users.

Torrez, a Democrat and former prosecutor now in his fourth year in the AG’s office, won a jury trial against Meta in March, in which he alleged the company failed to protect children from online predators.

New Mexico secured almost $1 billion in payouts after winning the case and therefore wasn’t part of the multistate suit that went to trial this month in Oakland, California, and settled on Wednesday. Meta is appealing the March verdict.

Cambridge Analytica was founded in 2013 by a billionaire Trump supporter and was financed in part by Steve Bannon, Trump’s former chief strategist.

In 2014, the political research firm struck a deal with a researcher who’d developed a seemingly innocuous personality quiz to collect information from hundreds of thousands of Facebook users, and later, from those users’ friends.

Unbeknownst to them, the developer ultimately shared a trove of data on 87 million people with Cambridge Analytica, which used it to target voters in 2016 with hyper-specific appeals through psychological and demographic modeling. That sharing occurred even after Facebook updated its policies to restrict how third-party apps access user data, New Mexico alleges.

The resulting uproar — which triggered a congressional inquiry and a public apology from Facebook founder and chief executive officer Mark Zuckerberg — dealt a blow to the company’s reputation at a time when it was already under fire for allowing Russian agents to exploit its platform to try to influence the 2016 election.

Meta agreed to pay an average of about $10 million each to the states and territories that participated in the Cambridge Analytica piece of Wednesday’s settlement. The states agreed to drop all current claims as well as any that might be based on information they discover in the future. The payments will start to go out in about 30 days.

Former District of Columbia Attorney General Karl Racine, who sued over the breach years ago, at the time called it “the largest consumer privacy scandal in the nation’s history.”

His successor, Brian Schwalb, is pressing ahead with the case. Schwalb’s office confirmed the suit is ongoing and declined to comment further.

Zuckerberg’s company has already paid record amounts to try put Cambridge Analytica behind it.

The company in 2019 agreed to a $5 billion settlement with the Federal Trade Commission — the largest of its kind at the time — to resolve a probe triggered by the Cambridge Analytica scandal.

Then, in December 2022, Meta agreed to pay $725 million to a vast group of Facebook users who sued over the breach, in a deal that their lawyers at the time called “the largest recovery ever achieved in a data privacy class action.”