Commentary: A judge just gave us 25 billion reasons why Meta’s privacy promises about its Muse AI bot shouldn’t be trusted

A New Mexico judge just issued a remarkable warning for users of Muse, the new AI-powered bot marketed by Meta Platforms: Sign up for this thing at your own risk.

Judge Francis J. Mathew didn’t specifically mention Muse in the blistering findings of facts he issued Wednesday, in which he socked Meta with a $25-billion penalty for its “lies” and “false promises” to protect the privacy of its users and keep their personal data secure.

Mathew laid out the “systematic pattern of deception” about those issues and others that Meta engaged in over more than a decade. Some of those “lies,” as it happens, are very much like the promises Meta has made about the security of Muse.

As recently as Wednesday, during a conference call for investment analysts about the company’s third-quarter financial results, Chief Executive Mark Zuckerberg boasted of the “state-of-the art privacy and security” that Meta has vested in Muse.

The truth is that throughout its history, as I noted recently and Mathew set forth in great detail, Meta has been a serial violator of its users’ privacy. In the past, that has cost the company dearly, though perhaps not enough. In 2019, the Federal Trade Commission hit the company, then known as Facebook, with a record $5-billion fine for violating the terms of a 2011 FTC settlement over privacy practices.

I pointed out then that, as big as the fine appeared to be, the company collected that much in revenue in an average month and more than four times as much in profit in a single year.

Whether the fine prompted the company to change its ways is hard to gauge. The New Mexico jury that on Sept. 25 found Meta guilty of years of deceit pinpointed numerous allegedly deceptive statements that Zuckerberg, his then-deputy, Sheryl Sandberg, and other executives made after the 2019 fine. But those statements generally involved the company’s supposed efforts to cleanse its platform of hate speech, misinformation and incitements to violence rather than claims about privacy protections.

Still, the burden of the jury verdict and Judge Mathew’s order is that Meta can’t be trusted to live up to its promises. Meta’s chief legal officer, C.J. Mahoney, told me by email that the judge’s ruling, along with the state attorney general’s “approach to enforcement … makes it all but impossible to do business in the state of New Mexico.” Mahoney said the ruling “seeks to impose a tax on speech to enforce new rules for what people can say online,” and that the company will appeal.

Meta didn’t respond, however, to my question about whether the ruling will or should shake Muse users’ confidence in Meta’s assurances of privacy protections.

Curiously, the professional investment community treated the $25-billion judgment as a non-story. Zuckerberg and Meta’s chief financial officer, Susan Li, didn’t get a single question about the case from investment analysts during their conference call Wednesday about the company’s third-quarter financial results.

The analysts’ indifference was all the more remarkable because the third-quarter results encompassed a $9.9-billion charge related to Meta’s $17-billion settlement of allegations by 47 states, including California, that it fomented social media addiction among children and teens and collected data on young users without parental consent. (The company didn’t admit to the states’ allegations in settling the case.)

The $25-billion New Mexico penalty, if it stands, could have a greater impact on earnings. Li even warned the analysts that “active legal and regulatory matters … could significantly impact our business and financial results” in the near future.

The $25-billion penalty might bite Meta’s finances more than the FTC’s $5-billion fine in 2019. It’s five times as large, for one thing. Last year, Meta’s annual revenue quadrupled to $201 billion over its 2019 results ($70.1 billion), and its net income roughly tripled to $60.5 billion over the $18.5-billion profit it recorded in 2019.

The broader investment community has not been as sanguine as the investment analysts. Meta shares fell by $48.67 to $648.45 in Thursday’s trading, a loss of 7%, though investors may have been less a reaction to the New Mexico ruling than a reaction to the company’s disclosure that it faces immense capital expenditures in developing its AI-related products such as Muse. Investors are also wary of Meta’s plan to issue new shares that would cement Zuckerberg’s voting control of the company, even if he has to sell shares to cover the California billionaire tax if it wins voter approval next month.

That brings us to the judge’s findings. These were based on the jury’s verdict that Meta committed 43.9 million “willful violations” of New Mexico’s unfair business practices law from May 2010 through mid-August 2021. At the maximum penalty of $5,000 per violation, Meta could have been liable for a penalty of $219.5 billion; the judge, showing compassion, cut that to $25 billion without explaining his reasoning. The state had sought a penalty of up to $40 billion.

Mathew pointed to the company’s obdurate disregard for punishment. “Penalties, consent agreements and decrees have not deterred Meta from using deceptive trade practices,” he wrote. Nor was this a case of a few rogue officials counteracting company policies. They were institutional.

“The violations were not confined to one statement, one speaker, one medium, or one aspect of Facebook’s business,” he found. They were “disseminated through numerous public channels, including Facebook’s own platform and Newsroom, earnings calls, nationally distributed television interviews, nationally distributed print and online media interviews, and public conferences.”

Moreover, the company knew it wasn’t telling the truth, Mathew found. It “continued making public representations concerning users’ control of data, third-party data misuse, misinformation, hate speech, and equal enforcement after employees, researchers, and senior personnel had internally identified that Facebook could not make good on its public promises.”

Evidence presented at trial indicated that insiders told Zuckerberg that “the proposed public communications were misleading.” And the company knew that “ordinary consumers” had no way of verifying that Facebook was telling the truth. When it came to privacy, Mathew found, “Facebook was aware that its users did not understand its privacy settings and took advantage of that to a grossly unfair degree.”

Rather than educate users how to use their privacy settings, the judge wrote, Zuckerberg chose to “capitalize on that lack of understanding in order to manipulate users into sharing more of their personal information publicly.”

“Give them a chance to change their privacy settings but obviously don’t encourage it,” Zuckerberg wrote internally, according to evidence presented at trial.

After the eruption of the Cambridge Analytical scandal in 2018, in which the personal data of as many as 87 million Facebook users had been shared with that British political consulting firm through a third-party app without their knowledge, Facebook promised to investigate all apps with access to user data and ban any found to be misusing the data. As Mathew found, however, Facebook didn’t conduct the investigation it promised — and knew at the time that it didn’t have the ability to take the announced actions.

Facebook’s promises to detect and delete misinformation and hate speech were similarly “deceptive,” Mathew wrote. In fact, “its systems … could be seen promoting this content.”

The New Mexico trial provided a good road map to what Meta’s business plan is all about. It’s about monetizing you, the user. Facebook snarfs up your personal information so it can sell advertising to corporate customers paying to use the data for targeting their ads.

The company “sell[s] everything but your name,” expert witness Colum Matheson of the University of Pittsburgh had testified. The less “meaningful control” users have of their data, the more data Meta has to sell, he said.

On Wednesday’s conference call, Zuckerberg and Li can be heard absolutely salivating at the money to be made this way, as Muse gets marketed toward ubiquity. Li spoke of “monetizing our AI products through subscriptions, transactions, advertising …”

Given those opportunities, do you think Meta will be able to resist the temptation to exploit the private information users give over to Muse in the mistaken impression that it will stay private? Me neither.

A New Mexico judge just issued a remarkable warning for users of Muse, the new AI-powered bot marketed by Meta Platforms: Sign up for this thing at your own risk.

Judge Francis J. Mathew didn’t specifically mention Muse in the blistering findings of facts he issued Wednesday, in which he socked Meta with a $25-billion penalty for its “lies” and “false promises” to protect the privacy of its users and keep their personal data secure.

Mathew laid out the “systematic pattern of deception” about those issues and others that Meta engaged in over more than a decade. Some of those “lies,” as it happens, are very much like the promises Meta has made about the security of Muse.

As recently as Wednesday, during a conference call for investment analysts about the company’s third-quarter financial results, Chief Executive Mark Zuckerberg boasted of the “state-of-the art privacy and security” that Meta has vested in Muse.

The truth is that throughout its history, as I noted recently and Mathew set forth in great detail, Meta has been a serial violator of its users’ privacy. In the past, that has cost the company dearly, though perhaps not enough. In 2019, the Federal Trade Commission hit the company, then known as Facebook, with a record $5-billion fine for violating the terms of a 2011 FTC settlement over privacy practices.

I pointed out then that, as big as the fine appeared to be, the company collected that much in revenue in an average month and more than four times as much in profit in a single year.

Whether the fine prompted the company to change its ways is hard to gauge. The New Mexico jury that on Sept. 25 found Meta guilty of years of deceit pinpointed numerous allegedly deceptive statements that Zuckerberg, his then-deputy, Sheryl Sandberg, and other executives made after the 2019 fine. But those statements generally involved the company’s supposed efforts to cleanse its platform of hate speech, misinformation and incitements to violence rather than claims about privacy protections.

Still, the burden of the jury verdict and Judge Mathew’s order is that Meta can’t be trusted to live up to its promises. Meta’s chief legal officer, C.J. Mahoney, told me by email that the judge’s ruling, along with the state attorney general’s “approach to enforcement … makes it all but impossible to do business in the state of New Mexico.” Mahoney said the ruling “seeks to impose a tax on speech to enforce new rules for what people can say online,” and that the company will appeal.

Meta didn’t respond, however, to my question about whether the ruling will or should shake Muse users’ confidence in Meta’s assurances of privacy protections.

Curiously, the professional investment community treated the $25-billion judgment as a non-story. Zuckerberg and Meta’s chief financial officer, Susan Li, didn’t get a single question about the case from investment analysts during their conference call Wednesday about the company’s third-quarter financial results.

The analysts’ indifference was all the more remarkable because the third-quarter results encompassed a $9.9-billion charge related to Meta’s $17-billion settlement of allegations by 47 states, including California, that it fomented social media addiction among children and teens and collected data on young users without parental consent. (The company didn’t admit to the states’ allegations in settling the case.)

The $25-billion New Mexico penalty, if it stands, could have a greater impact on earnings. Li even warned the analysts that “active legal and regulatory matters … could significantly impact our business and financial results” in the near future.

The $25-billion penalty might bite Meta’s finances more than the FTC’s $5-billion fine in 2019. It’s five times as large, for one thing. Last year, Meta’s annual revenue quadrupled to $201 billion over its 2019 results ($70.1 billion), and its net income roughly tripled to $60.5 billion over the $18.5-billion profit it recorded in 2019.

The broader investment community has not been as sanguine as the investment analysts. Meta shares fell by $48.67 to $648.45 in Thursday’s trading, a loss of 7%, though investors may have been less a reaction to the New Mexico ruling than a reaction to the company’s disclosure that it faces immense capital expenditures in developing its AI-related products such as Muse. Investors are also wary of Meta’s plan to issue new shares that would cement Zuckerberg’s voting control of the company, even if he has to sell shares to cover the California billionaire tax if it wins voter approval next month.

That brings us to the judge’s findings. These were based on the jury’s verdict that Meta committed 43.9 million “willful violations” of New Mexico’s unfair business practices law from May 2010 through mid-August 2021. At the maximum penalty of $5,000 per violation, Meta could have been liable for a penalty of $219.5 billion; the judge, showing compassion, cut that to $25 billion without explaining his reasoning. The state had sought a penalty of up to $40 billion.

Mathew pointed to the company’s obdurate disregard for punishment. “Penalties, consent agreements and decrees have not deterred Meta from using deceptive trade practices,” he wrote. Nor was this a case of a few rogue officials counteracting company policies. They were institutional.

“The violations were not confined to one statement, one speaker, one medium, or one aspect of Facebook’s business,” he found. They were “disseminated through numerous public channels, including Facebook’s own platform and Newsroom, earnings calls, nationally distributed television interviews, nationally distributed print and online media interviews, and public conferences.”

Moreover, the company knew it wasn’t telling the truth, Mathew found. It “continued making public representations concerning users’ control of data, third-party data misuse, misinformation, hate speech, and equal enforcement after employees, researchers, and senior personnel had internally identified that Facebook could not make good on its public promises.”

Evidence presented at trial indicated that insiders told Zuckerberg that “the proposed public communications were misleading.” And the company knew that “ordinary consumers” had no way of verifying that Facebook was telling the truth. When it came to privacy, Mathew found, “Facebook was aware that its users did not understand its privacy settings and took advantage of that to a grossly unfair degree.”

Rather than educate users how to use their privacy settings, the judge wrote, Zuckerberg chose to “capitalize on that lack of understanding in order to manipulate users into sharing more of their personal information publicly.”

“Give them a chance to change their privacy settings but obviously don’t encourage it,” Zuckerberg wrote internally, according to evidence presented at trial.

After the eruption of the Cambridge Analytical scandal in 2018, in which the personal data of as many as 87 million Facebook users had been shared with that British political consulting firm through a third-party app without their knowledge, Facebook promised to investigate all apps with access to user data and ban any found to be misusing the data. As Mathew found, however, Facebook didn’t conduct the investigation it promised — and knew at the time that it didn’t have the ability to take the announced actions.

Facebook’s promises to detect and delete misinformation and hate speech were similarly “deceptive,” Mathew wrote. In fact, “its systems … could be seen promoting this content.”

The New Mexico trial provided a good road map to what Meta’s business plan is all about. It’s about monetizing you, the user. Facebook snarfs up your personal information so it can sell advertising to corporate customers paying to use the data for targeting their ads.

The company “sell[s] everything but your name,” expert witness Colum Matheson of the University of Pittsburgh had testified. The less “meaningful control” users have of their data, the more data Meta has to sell, he said.

On Wednesday’s conference call, Zuckerberg and Li can be heard absolutely salivating at the money to be made this way, as Muse gets marketed toward ubiquity. Li spoke of “monetizing our AI products through subscriptions, transactions, advertising …”

Given those opportunities, do you think Meta will be able to resist the temptation to exploit the private information users give over to Muse in the mistaken impression that it will stay private? Me neither.

A New Mexico judge just issued a remarkable warning for users of Muse, the new AI-powered bot marketed by Meta Platforms: Sign up for this thing at your own risk.

Judge Francis J. Mathew didn’t specifically mention Muse in the blistering findings of facts he issued Wednesday, in which he socked Meta with a $25-billion penalty for its “lies” and “false promises” to protect the privacy of its users and keep their personal data secure.

Mathew laid out the “systematic pattern of deception” about those issues and others that Meta engaged in over more than a decade. Some of those “lies,” as it happens, are very much like the promises Meta has made about the security of Muse.

As recently as Wednesday, during a conference call for investment analysts about the company’s third-quarter financial results, Chief Executive Mark Zuckerberg boasted of the “state-of-the art privacy and security” that Meta has vested in Muse.

The truth is that throughout its history, as I noted recently and Mathew set forth in great detail, Meta has been a serial violator of its users’ privacy. In the past, that has cost the company dearly, though perhaps not enough. In 2019, the Federal Trade Commission hit the company, then known as Facebook, with a record $5-billion fine for violating the terms of a 2011 FTC settlement over privacy practices.

I pointed out then that, as big as the fine appeared to be, the company collected that much in revenue in an average month and more than four times as much in profit in a single year.

Whether the fine prompted the company to change its ways is hard to gauge. The New Mexico jury that on Sept. 25 found Meta guilty of years of deceit pinpointed numerous allegedly deceptive statements that Zuckerberg, his then-deputy, Sheryl Sandberg, and other executives made after the 2019 fine. But those statements generally involved the company’s supposed efforts to cleanse its platform of hate speech, misinformation and incitements to violence rather than claims about privacy protections.

Still, the burden of the jury verdict and Judge Mathew’s order is that Meta can’t be trusted to live up to its promises. Meta’s chief legal officer, C.J. Mahoney, told me by email that the judge’s ruling, along with the state attorney general’s “approach to enforcement … makes it all but impossible to do business in the state of New Mexico.” Mahoney said the ruling “seeks to impose a tax on speech to enforce new rules for what people can say online,” and that the company will appeal.

Meta didn’t respond, however, to my question about whether the ruling will or should shake Muse users’ confidence in Meta’s assurances of privacy protections.

Curiously, the professional investment community treated the $25-billion judgment as a non-story. Zuckerberg and Meta’s chief financial officer, Susan Li, didn’t get a single question about the case from investment analysts during their conference call Wednesday about the company’s third-quarter financial results.

The analysts’ indifference was all the more remarkable because the third-quarter results encompassed a $9.9-billion charge related to Meta’s $17-billion settlement of allegations by 47 states, including California, that it fomented social media addiction among children and teens and collected data on young users without parental consent. (The company didn’t admit to the states’ allegations in settling the case.)

The $25-billion New Mexico penalty, if it stands, could have a greater impact on earnings. Li even warned the analysts that “active legal and regulatory matters … could significantly impact our business and financial results” in the near future.

The $25-billion penalty might bite Meta’s finances more than the FTC’s $5-billion fine in 2019. It’s five times as large, for one thing. Last year, Meta’s annual revenue quadrupled to $201 billion over its 2019 results ($70.1 billion), and its net income roughly tripled to $60.5 billion over the $18.5-billion profit it recorded in 2019.

The broader investment community has not been as sanguine as the investment analysts. Meta shares fell by $48.67 to $648.45 in Thursday’s trading, a loss of 7%, though investors may have been less a reaction to the New Mexico ruling than a reaction to the company’s disclosure that it faces immense capital expenditures in developing its AI-related products such as Muse. Investors are also wary of Meta’s plan to issue new shares that would cement Zuckerberg’s voting control of the company, even if he has to sell shares to cover the California billionaire tax if it wins voter approval next month.

That brings us to the judge’s findings. These were based on the jury’s verdict that Meta committed 43.9 million “willful violations” of New Mexico’s unfair business practices law from May 2010 through mid-August 2021. At the maximum penalty of $5,000 per violation, Meta could have been liable for a penalty of $219.5 billion; the judge, showing compassion, cut that to $25 billion without explaining his reasoning. The state had sought a penalty of up to $40 billion.

Mathew pointed to the company’s obdurate disregard for punishment. “Penalties, consent agreements and decrees have not deterred Meta from using deceptive trade practices,” he wrote. Nor was this a case of a few rogue officials counteracting company policies. They were institutional.

“The violations were not confined to one statement, one speaker, one medium, or one aspect of Facebook’s business,” he found. They were “disseminated through numerous public channels, including Facebook’s own platform and Newsroom, earnings calls, nationally distributed television interviews, nationally distributed print and online media interviews, and public conferences.”

Moreover, the company knew it wasn’t telling the truth, Mathew found. It “continued making public representations concerning users’ control of data, third-party data misuse, misinformation, hate speech, and equal enforcement after employees, researchers, and senior personnel had internally identified that Facebook could not make good on its public promises.”

Evidence presented at trial indicated that insiders told Zuckerberg that “the proposed public communications were misleading.” And the company knew that “ordinary consumers” had no way of verifying that Facebook was telling the truth. When it came to privacy, Mathew found, “Facebook was aware that its users did not understand its privacy settings and took advantage of that to a grossly unfair degree.”

Rather than educate users how to use their privacy settings, the judge wrote, Zuckerberg chose to “capitalize on that lack of understanding in order to manipulate users into sharing more of their personal information publicly.”

“Give them a chance to change their privacy settings but obviously don’t encourage it,” Zuckerberg wrote internally, according to evidence presented at trial.

After the eruption of the Cambridge Analytical scandal in 2018, in which the personal data of as many as 87 million Facebook users had been shared with that British political consulting firm through a third-party app without their knowledge, Facebook promised to investigate all apps with access to user data and ban any found to be misusing the data. As Mathew found, however, Facebook didn’t conduct the investigation it promised — and knew at the time that it didn’t have the ability to take the announced actions.

Facebook’s promises to detect and delete misinformation and hate speech were similarly “deceptive,” Mathew wrote. In fact, “its systems … could be seen promoting this content.”

The New Mexico trial provided a good road map to what Meta’s business plan is all about. It’s about monetizing you, the user. Facebook snarfs up your personal information so it can sell advertising to corporate customers paying to use the data for targeting their ads.

The company “sell[s] everything but your name,” expert witness Colum Matheson of the University of Pittsburgh had testified. The less “meaningful control” users have of their data, the more data Meta has to sell, he said.

On Wednesday’s conference call, Zuckerberg and Li can be heard absolutely salivating at the money to be made this way, as Muse gets marketed toward ubiquity. Li spoke of “monetizing our AI products through subscriptions, transactions, advertising …”

Given those opportunities, do you think Meta will be able to resist the temptation to exploit the private information users give over to Muse in the mistaken impression that it will stay private? Me neither.

A New Mexico judge just issued a remarkable warning for users of Muse, the new AI-powered bot marketed by Meta Platforms: Sign up for this thing at your own risk.

Judge Francis J. Mathew didn’t specifically mention Muse in the blistering findings of facts he issued Wednesday, in which he socked Meta with a $25-billion penalty for its “lies” and “false promises” to protect the privacy of its users and keep their personal data secure.

Mathew laid out the “systematic pattern of deception” about those issues and others that Meta engaged in over more than a decade. Some of those “lies,” as it happens, are very much like the promises Meta has made about the security of Muse.

As recently as Wednesday, during a conference call for investment analysts about the company’s third-quarter financial results, Chief Executive Mark Zuckerberg boasted of the “state-of-the art privacy and security” that Meta has vested in Muse.

The truth is that throughout its history, as I noted recently and Mathew set forth in great detail, Meta has been a serial violator of its users’ privacy. In the past, that has cost the company dearly, though perhaps not enough. In 2019, the Federal Trade Commission hit the company, then known as Facebook, with a record $5-billion fine for violating the terms of a 2011 FTC settlement over privacy practices.

I pointed out then that, as big as the fine appeared to be, the company collected that much in revenue in an average month and more than four times as much in profit in a single year.

Whether the fine prompted the company to change its ways is hard to gauge. The New Mexico jury that on Sept. 25 found Meta guilty of years of deceit pinpointed numerous allegedly deceptive statements that Zuckerberg, his then-deputy, Sheryl Sandberg, and other executives made after the 2019 fine. But those statements generally involved the company’s supposed efforts to cleanse its platform of hate speech, misinformation and incitements to violence rather than claims about privacy protections.

Still, the burden of the jury verdict and Judge Mathew’s order is that Meta can’t be trusted to live up to its promises. Meta’s chief legal officer, C.J. Mahoney, told me by email that the judge’s ruling, along with the state attorney general’s “approach to enforcement … makes it all but impossible to do business in the state of New Mexico.” Mahoney said the ruling “seeks to impose a tax on speech to enforce new rules for what people can say online,” and that the company will appeal.

Meta didn’t respond, however, to my question about whether the ruling will or should shake Muse users’ confidence in Meta’s assurances of privacy protections.

Curiously, the professional investment community treated the $25-billion judgment as a non-story. Zuckerberg and Meta’s chief financial officer, Susan Li, didn’t get a single question about the case from investment analysts during their conference call Wednesday about the company’s third-quarter financial results.

The analysts’ indifference was all the more remarkable because the third-quarter results encompassed a $9.9-billion charge related to Meta’s $17-billion settlement of allegations by 47 states, including California, that it fomented social media addiction among children and teens and collected data on young users without parental consent. (The company didn’t admit to the states’ allegations in settling the case.)

The $25-billion New Mexico penalty, if it stands, could have a greater impact on earnings. Li even warned the analysts that “active legal and regulatory matters … could significantly impact our business and financial results” in the near future.

The $25-billion penalty might bite Meta’s finances more than the FTC’s $5-billion fine in 2019. It’s five times as large, for one thing. Last year, Meta’s annual revenue quadrupled to $201 billion over its 2019 results ($70.1 billion), and its net income roughly tripled to $60.5 billion over the $18.5-billion profit it recorded in 2019.

The broader investment community has not been as sanguine as the investment analysts. Meta shares fell by $48.67 to $648.45 in Thursday’s trading, a loss of 7%, though investors may have been less a reaction to the New Mexico ruling than a reaction to the company’s disclosure that it faces immense capital expenditures in developing its AI-related products such as Muse. Investors are also wary of Meta’s plan to issue new shares that would cement Zuckerberg’s voting control of the company, even if he has to sell shares to cover the California billionaire tax if it wins voter approval next month.

That brings us to the judge’s findings. These were based on the jury’s verdict that Meta committed 43.9 million “willful violations” of New Mexico’s unfair business practices law from May 2010 through mid-August 2021. At the maximum penalty of $5,000 per violation, Meta could have been liable for a penalty of $219.5 billion; the judge, showing compassion, cut that to $25 billion without explaining his reasoning. The state had sought a penalty of up to $40 billion.

Mathew pointed to the company’s obdurate disregard for punishment. “Penalties, consent agreements and decrees have not deterred Meta from using deceptive trade practices,” he wrote. Nor was this a case of a few rogue officials counteracting company policies. They were institutional.

“The violations were not confined to one statement, one speaker, one medium, or one aspect of Facebook’s business,” he found. They were “disseminated through numerous public channels, including Facebook’s own platform and Newsroom, earnings calls, nationally distributed television interviews, nationally distributed print and online media interviews, and public conferences.”

Moreover, the company knew it wasn’t telling the truth, Mathew found. It “continued making public representations concerning users’ control of data, third-party data misuse, misinformation, hate speech, and equal enforcement after employees, researchers, and senior personnel had internally identified that Facebook could not make good on its public promises.”

Evidence presented at trial indicated that insiders told Zuckerberg that “the proposed public communications were misleading.” And the company knew that “ordinary consumers” had no way of verifying that Facebook was telling the truth. When it came to privacy, Mathew found, “Facebook was aware that its users did not understand its privacy settings and took advantage of that to a grossly unfair degree.”

Rather than educate users how to use their privacy settings, the judge wrote, Zuckerberg chose to “capitalize on that lack of understanding in order to manipulate users into sharing more of their personal information publicly.”

“Give them a chance to change their privacy settings but obviously don’t encourage it,” Zuckerberg wrote internally, according to evidence presented at trial.

After the eruption of the Cambridge Analytical scandal in 2018, in which the personal data of as many as 87 million Facebook users had been shared with that British political consulting firm through a third-party app without their knowledge, Facebook promised to investigate all apps with access to user data and ban any found to be misusing the data. As Mathew found, however, Facebook didn’t conduct the investigation it promised — and knew at the time that it didn’t have the ability to take the announced actions.

Facebook’s promises to detect and delete misinformation and hate speech were similarly “deceptive,” Mathew wrote. In fact, “its systems … could be seen promoting this content.”

The New Mexico trial provided a good road map to what Meta’s business plan is all about. It’s about monetizing you, the user. Facebook snarfs up your personal information so it can sell advertising to corporate customers paying to use the data for targeting their ads.

The company “sell[s] everything but your name,” expert witness Colum Matheson of the University of Pittsburgh had testified. The less “meaningful control” users have of their data, the more data Meta has to sell, he said.

On Wednesday’s conference call, Zuckerberg and Li can be heard absolutely salivating at the money to be made this way, as Muse gets marketed toward ubiquity. Li spoke of “monetizing our AI products through subscriptions, transactions, advertising …”

Given those opportunities, do you think Meta will be able to resist the temptation to exploit the private information users give over to Muse in the mistaken impression that it will stay private? Me neither.

A New Mexico judge just issued a remarkable warning for users of Muse, the new AI-powered bot marketed by Meta Platforms: Sign up for this thing at your own risk.

Judge Francis J. Mathew didn’t specifically mention Muse in the blistering findings of facts he issued Wednesday, in which he socked Meta with a $25-billion penalty for its “lies” and “false promises” to protect the privacy of its users and keep their personal data secure.

Mathew laid out the “systematic pattern of deception” about those issues and others that Meta engaged in over more than a decade. Some of those “lies,” as it happens, are very much like the promises Meta has made about the security of Muse.

As recently as Wednesday, during a conference call for investment analysts about the company’s third-quarter financial results, Chief Executive Mark Zuckerberg boasted of the “state-of-the art privacy and security” that Meta has vested in Muse.

The truth is that throughout its history, as I noted recently and Mathew set forth in great detail, Meta has been a serial violator of its users’ privacy. In the past, that has cost the company dearly, though perhaps not enough. In 2019, the Federal Trade Commission hit the company, then known as Facebook, with a record $5-billion fine for violating the terms of a 2011 FTC settlement over privacy practices.

I pointed out then that, as big as the fine appeared to be, the company collected that much in revenue in an average month and more than four times as much in profit in a single year.

Whether the fine prompted the company to change its ways is hard to gauge. The New Mexico jury that on Sept. 25 found Meta guilty of years of deceit pinpointed numerous allegedly deceptive statements that Zuckerberg, his then-deputy, Sheryl Sandberg, and other executives made after the 2019 fine. But those statements generally involved the company’s supposed efforts to cleanse its platform of hate speech, misinformation and incitements to violence rather than claims about privacy protections.

Still, the burden of the jury verdict and Judge Mathew’s order is that Meta can’t be trusted to live up to its promises. Meta’s chief legal officer, C.J. Mahoney, told me by email that the judge’s ruling, along with the state attorney general’s “approach to enforcement … makes it all but impossible to do business in the state of New Mexico.” Mahoney said the ruling “seeks to impose a tax on speech to enforce new rules for what people can say online,” and that the company will appeal.

Meta didn’t respond, however, to my question about whether the ruling will or should shake Muse users’ confidence in Meta’s assurances of privacy protections.

Curiously, the professional investment community treated the $25-billion judgment as a non-story. Zuckerberg and Meta’s chief financial officer, Susan Li, didn’t get a single question about the case from investment analysts during their conference call Wednesday about the company’s third-quarter financial results.

The analysts’ indifference was all the more remarkable because the third-quarter results encompassed a $9.9-billion charge related to Meta’s $17-billion settlement of allegations by 47 states, including California, that it fomented social media addiction among children and teens and collected data on young users without parental consent. (The company didn’t admit to the states’ allegations in settling the case.)

The $25-billion New Mexico penalty, if it stands, could have a greater impact on earnings. Li even warned the analysts that “active legal and regulatory matters … could significantly impact our business and financial results” in the near future.

The $25-billion penalty might bite Meta’s finances more than the FTC’s $5-billion fine in 2019. It’s five times as large, for one thing. Last year, Meta’s annual revenue quadrupled to $201 billion over its 2019 results ($70.1 billion), and its net income roughly tripled to $60.5 billion over the $18.5-billion profit it recorded in 2019.

The broader investment community has not been as sanguine as the investment analysts. Meta shares fell by $48.67 to $648.45 in Thursday’s trading, a loss of 7%, though investors may have been less a reaction to the New Mexico ruling than a reaction to the company’s disclosure that it faces immense capital expenditures in developing its AI-related products such as Muse. Investors are also wary of Meta’s plan to issue new shares that would cement Zuckerberg’s voting control of the company, even if he has to sell shares to cover the California billionaire tax if it wins voter approval next month.

That brings us to the judge’s findings. These were based on the jury’s verdict that Meta committed 43.9 million “willful violations” of New Mexico’s unfair business practices law from May 2010 through mid-August 2021. At the maximum penalty of $5,000 per violation, Meta could have been liable for a penalty of $219.5 billion; the judge, showing compassion, cut that to $25 billion without explaining his reasoning. The state had sought a penalty of up to $40 billion.

Mathew pointed to the company’s obdurate disregard for punishment. “Penalties, consent agreements and decrees have not deterred Meta from using deceptive trade practices,” he wrote. Nor was this a case of a few rogue officials counteracting company policies. They were institutional.

“The violations were not confined to one statement, one speaker, one medium, or one aspect of Facebook’s business,” he found. They were “disseminated through numerous public channels, including Facebook’s own platform and Newsroom, earnings calls, nationally distributed television interviews, nationally distributed print and online media interviews, and public conferences.”

Moreover, the company knew it wasn’t telling the truth, Mathew found. It “continued making public representations concerning users’ control of data, third-party data misuse, misinformation, hate speech, and equal enforcement after employees, researchers, and senior personnel had internally identified that Facebook could not make good on its public promises.”

Evidence presented at trial indicated that insiders told Zuckerberg that “the proposed public communications were misleading.” And the company knew that “ordinary consumers” had no way of verifying that Facebook was telling the truth. When it came to privacy, Mathew found, “Facebook was aware that its users did not understand its privacy settings and took advantage of that to a grossly unfair degree.”

Rather than educate users how to use their privacy settings, the judge wrote, Zuckerberg chose to “capitalize on that lack of understanding in order to manipulate users into sharing more of their personal information publicly.”

“Give them a chance to change their privacy settings but obviously don’t encourage it,” Zuckerberg wrote internally, according to evidence presented at trial.

After the eruption of the Cambridge Analytical scandal in 2018, in which the personal data of as many as 87 million Facebook users had been shared with that British political consulting firm through a third-party app without their knowledge, Facebook promised to investigate all apps with access to user data and ban any found to be misusing the data. As Mathew found, however, Facebook didn’t conduct the investigation it promised — and knew at the time that it didn’t have the ability to take the announced actions.

Facebook’s promises to detect and delete misinformation and hate speech were similarly “deceptive,” Mathew wrote. In fact, “its systems … could be seen promoting this content.”

The New Mexico trial provided a good road map to what Meta’s business plan is all about. It’s about monetizing you, the user. Facebook snarfs up your personal information so it can sell advertising to corporate customers paying to use the data for targeting their ads.

The company “sell[s] everything but your name,” expert witness Colum Matheson of the University of Pittsburgh had testified. The less “meaningful control” users have of their data, the more data Meta has to sell, he said.

On Wednesday’s conference call, Zuckerberg and Li can be heard absolutely salivating at the money to be made this way, as Muse gets marketed toward ubiquity. Li spoke of “monetizing our AI products through subscriptions, transactions, advertising …”

Given those opportunities, do you think Meta will be able to resist the temptation to exploit the private information users give over to Muse in the mistaken impression that it will stay private? Me neither.

A New Mexico judge just issued a remarkable warning for users of Muse, the new AI-powered bot marketed by Meta Platforms: Sign up for this thing at your own risk.

Judge Francis J. Mathew didn’t specifically mention Muse in the blistering findings of facts he issued Wednesday, in which he socked Meta with a $25-billion penalty for its “lies” and “false promises” to protect the privacy of its users and keep their personal data secure.

Mathew laid out the “systematic pattern of deception” about those issues and others that Meta engaged in over more than a decade. Some of those “lies,” as it happens, are very much like the promises Meta has made about the security of Muse.

As recently as Wednesday, during a conference call for investment analysts about the company’s third-quarter financial results, Chief Executive Mark Zuckerberg boasted of the “state-of-the art privacy and security” that Meta has vested in Muse.

The truth is that throughout its history, as I noted recently and Mathew set forth in great detail, Meta has been a serial violator of its users’ privacy. In the past, that has cost the company dearly, though perhaps not enough. In 2019, the Federal Trade Commission hit the company, then known as Facebook, with a record $5-billion fine for violating the terms of a 2011 FTC settlement over privacy practices.

I pointed out then that, as big as the fine appeared to be, the company collected that much in revenue in an average month and more than four times as much in profit in a single year.

Whether the fine prompted the company to change its ways is hard to gauge. The New Mexico jury that on Sept. 25 found Meta guilty of years of deceit pinpointed numerous allegedly deceptive statements that Zuckerberg, his then-deputy, Sheryl Sandberg, and other executives made after the 2019 fine. But those statements generally involved the company’s supposed efforts to cleanse its platform of hate speech, misinformation and incitements to violence rather than claims about privacy protections.

Still, the burden of the jury verdict and Judge Mathew’s order is that Meta can’t be trusted to live up to its promises. Meta’s chief legal officer, C.J. Mahoney, told me by email that the judge’s ruling, along with the state attorney general’s “approach to enforcement … makes it all but impossible to do business in the state of New Mexico.” Mahoney said the ruling “seeks to impose a tax on speech to enforce new rules for what people can say online,” and that the company will appeal.

Meta didn’t respond, however, to my question about whether the ruling will or should shake Muse users’ confidence in Meta’s assurances of privacy protections.

Curiously, the professional investment community treated the $25-billion judgment as a non-story. Zuckerberg and Meta’s chief financial officer, Susan Li, didn’t get a single question about the case from investment analysts during their conference call Wednesday about the company’s third-quarter financial results.

The analysts’ indifference was all the more remarkable because the third-quarter results encompassed a $9.9-billion charge related to Meta’s $17-billion settlement of allegations by 47 states, including California, that it fomented social media addiction among children and teens and collected data on young users without parental consent. (The company didn’t admit to the states’ allegations in settling the case.)

The $25-billion New Mexico penalty, if it stands, could have a greater impact on earnings. Li even warned the analysts that “active legal and regulatory matters … could significantly impact our business and financial results” in the near future.

The $25-billion penalty might bite Meta’s finances more than the FTC’s $5-billion fine in 2019. It’s five times as large, for one thing. Last year, Meta’s annual revenue quadrupled to $201 billion over its 2019 results ($70.1 billion), and its net income roughly tripled to $60.5 billion over the $18.5-billion profit it recorded in 2019.

The broader investment community has not been as sanguine as the investment analysts. Meta shares fell by $48.67 to $648.45 in Thursday’s trading, a loss of 7%, though investors may have been less a reaction to the New Mexico ruling than a reaction to the company’s disclosure that it faces immense capital expenditures in developing its AI-related products such as Muse. Investors are also wary of Meta’s plan to issue new shares that would cement Zuckerberg’s voting control of the company, even if he has to sell shares to cover the California billionaire tax if it wins voter approval next month.

That brings us to the judge’s findings. These were based on the jury’s verdict that Meta committed 43.9 million “willful violations” of New Mexico’s unfair business practices law from May 2010 through mid-August 2021. At the maximum penalty of $5,000 per violation, Meta could have been liable for a penalty of $219.5 billion; the judge, showing compassion, cut that to $25 billion without explaining his reasoning. The state had sought a penalty of up to $40 billion.

Mathew pointed to the company’s obdurate disregard for punishment. “Penalties, consent agreements and decrees have not deterred Meta from using deceptive trade practices,” he wrote. Nor was this a case of a few rogue officials counteracting company policies. They were institutional.

“The violations were not confined to one statement, one speaker, one medium, or one aspect of Facebook’s business,” he found. They were “disseminated through numerous public channels, including Facebook’s own platform and Newsroom, earnings calls, nationally distributed television interviews, nationally distributed print and online media interviews, and public conferences.”

Moreover, the company knew it wasn’t telling the truth, Mathew found. It “continued making public representations concerning users’ control of data, third-party data misuse, misinformation, hate speech, and equal enforcement after employees, researchers, and senior personnel had internally identified that Facebook could not make good on its public promises.”

Evidence presented at trial indicated that insiders told Zuckerberg that “the proposed public communications were misleading.” And the company knew that “ordinary consumers” had no way of verifying that Facebook was telling the truth. When it came to privacy, Mathew found, “Facebook was aware that its users did not understand its privacy settings and took advantage of that to a grossly unfair degree.”

Rather than educate users how to use their privacy settings, the judge wrote, Zuckerberg chose to “capitalize on that lack of understanding in order to manipulate users into sharing more of their personal information publicly.”

“Give them a chance to change their privacy settings but obviously don’t encourage it,” Zuckerberg wrote internally, according to evidence presented at trial.

After the eruption of the Cambridge Analytical scandal in 2018, in which the personal data of as many as 87 million Facebook users had been shared with that British political consulting firm through a third-party app without their knowledge, Facebook promised to investigate all apps with access to user data and ban any found to be misusing the data. As Mathew found, however, Facebook didn’t conduct the investigation it promised — and knew at the time that it didn’t have the ability to take the announced actions.

Facebook’s promises to detect and delete misinformation and hate speech were similarly “deceptive,” Mathew wrote. In fact, “its systems … could be seen promoting this content.”

The New Mexico trial provided a good road map to what Meta’s business plan is all about. It’s about monetizing you, the user. Facebook snarfs up your personal information so it can sell advertising to corporate customers paying to use the data for targeting their ads.

The company “sell[s] everything but your name,” expert witness Colum Matheson of the University of Pittsburgh had testified. The less “meaningful control” users have of their data, the more data Meta has to sell, he said.

On Wednesday’s conference call, Zuckerberg and Li can be heard absolutely salivating at the money to be made this way, as Muse gets marketed toward ubiquity. Li spoke of “monetizing our AI products through subscriptions, transactions, advertising …”

Given those opportunities, do you think Meta will be able to resist the temptation to exploit the private information users give over to Muse in the mistaken impression that it will stay private? Me neither.

A New Mexico judge just issued a remarkable warning for users of Muse, the new AI-powered bot marketed by Meta Platforms: Sign up for this thing at your own risk.

Judge Francis J. Mathew didn’t specifically mention Muse in the blistering findings of facts he issued Wednesday, in which he socked Meta with a $25-billion penalty for its “lies” and “false promises” to protect the privacy of its users and keep their personal data secure.

Mathew laid out the “systematic pattern of deception” about those issues and others that Meta engaged in over more than a decade. Some of those “lies,” as it happens, are very much like the promises Meta has made about the security of Muse.

As recently as Wednesday, during a conference call for investment analysts about the company’s third-quarter financial results, Chief Executive Mark Zuckerberg boasted of the “state-of-the art privacy and security” that Meta has vested in Muse.

The truth is that throughout its history, as I noted recently and Mathew set forth in great detail, Meta has been a serial violator of its users’ privacy. In the past, that has cost the company dearly, though perhaps not enough. In 2019, the Federal Trade Commission hit the company, then known as Facebook, with a record $5-billion fine for violating the terms of a 2011 FTC settlement over privacy practices.

I pointed out then that, as big as the fine appeared to be, the company collected that much in revenue in an average month and more than four times as much in profit in a single year.

Whether the fine prompted the company to change its ways is hard to gauge. The New Mexico jury that on Sept. 25 found Meta guilty of years of deceit pinpointed numerous allegedly deceptive statements that Zuckerberg, his then-deputy, Sheryl Sandberg, and other executives made after the 2019 fine. But those statements generally involved the company’s supposed efforts to cleanse its platform of hate speech, misinformation and incitements to violence rather than claims about privacy protections.

Still, the burden of the jury verdict and Judge Mathew’s order is that Meta can’t be trusted to live up to its promises. Meta’s chief legal officer, C.J. Mahoney, told me by email that the judge’s ruling, along with the state attorney general’s “approach to enforcement … makes it all but impossible to do business in the state of New Mexico.” Mahoney said the ruling “seeks to impose a tax on speech to enforce new rules for what people can say online,” and that the company will appeal.

Meta didn’t respond, however, to my question about whether the ruling will or should shake Muse users’ confidence in Meta’s assurances of privacy protections.

Curiously, the professional investment community treated the $25-billion judgment as a non-story. Zuckerberg and Meta’s chief financial officer, Susan Li, didn’t get a single question about the case from investment analysts during their conference call Wednesday about the company’s third-quarter financial results.

The analysts’ indifference was all the more remarkable because the third-quarter results encompassed a $9.9-billion charge related to Meta’s $17-billion settlement of allegations by 47 states, including California, that it fomented social media addiction among children and teens and collected data on young users without parental consent. (The company didn’t admit to the states’ allegations in settling the case.)

The $25-billion New Mexico penalty, if it stands, could have a greater impact on earnings. Li even warned the analysts that “active legal and regulatory matters … could significantly impact our business and financial results” in the near future.

The $25-billion penalty might bite Meta’s finances more than the FTC’s $5-billion fine in 2019. It’s five times as large, for one thing. Last year, Meta’s annual revenue quadrupled to $201 billion over its 2019 results ($70.1 billion), and its net income roughly tripled to $60.5 billion over the $18.5-billion profit it recorded in 2019.

The broader investment community has not been as sanguine as the investment analysts. Meta shares fell by $48.67 to $648.45 in Thursday’s trading, a loss of 7%, though investors may have been less a reaction to the New Mexico ruling than a reaction to the company’s disclosure that it faces immense capital expenditures in developing its AI-related products such as Muse. Investors are also wary of Meta’s plan to issue new shares that would cement Zuckerberg’s voting control of the company, even if he has to sell shares to cover the California billionaire tax if it wins voter approval next month.

That brings us to the judge’s findings. These were based on the jury’s verdict that Meta committed 43.9 million “willful violations” of New Mexico’s unfair business practices law from May 2010 through mid-August 2021. At the maximum penalty of $5,000 per violation, Meta could have been liable for a penalty of $219.5 billion; the judge, showing compassion, cut that to $25 billion without explaining his reasoning. The state had sought a penalty of up to $40 billion.

Mathew pointed to the company’s obdurate disregard for punishment. “Penalties, consent agreements and decrees have not deterred Meta from using deceptive trade practices,” he wrote. Nor was this a case of a few rogue officials counteracting company policies. They were institutional.

“The violations were not confined to one statement, one speaker, one medium, or one aspect of Facebook’s business,” he found. They were “disseminated through numerous public channels, including Facebook’s own platform and Newsroom, earnings calls, nationally distributed television interviews, nationally distributed print and online media interviews, and public conferences.”

Moreover, the company knew it wasn’t telling the truth, Mathew found. It “continued making public representations concerning users’ control of data, third-party data misuse, misinformation, hate speech, and equal enforcement after employees, researchers, and senior personnel had internally identified that Facebook could not make good on its public promises.”

Evidence presented at trial indicated that insiders told Zuckerberg that “the proposed public communications were misleading.” And the company knew that “ordinary consumers” had no way of verifying that Facebook was telling the truth. When it came to privacy, Mathew found, “Facebook was aware that its users did not understand its privacy settings and took advantage of that to a grossly unfair degree.”

Rather than educate users how to use their privacy settings, the judge wrote, Zuckerberg chose to “capitalize on that lack of understanding in order to manipulate users into sharing more of their personal information publicly.”

“Give them a chance to change their privacy settings but obviously don’t encourage it,” Zuckerberg wrote internally, according to evidence presented at trial.

After the eruption of the Cambridge Analytical scandal in 2018, in which the personal data of as many as 87 million Facebook users had been shared with that British political consulting firm through a third-party app without their knowledge, Facebook promised to investigate all apps with access to user data and ban any found to be misusing the data. As Mathew found, however, Facebook didn’t conduct the investigation it promised — and knew at the time that it didn’t have the ability to take the announced actions.

Facebook’s promises to detect and delete misinformation and hate speech were similarly “deceptive,” Mathew wrote. In fact, “its systems … could be seen promoting this content.”

The New Mexico trial provided a good road map to what Meta’s business plan is all about. It’s about monetizing you, the user. Facebook snarfs up your personal information so it can sell advertising to corporate customers paying to use the data for targeting their ads.

The company “sell[s] everything but your name,” expert witness Colum Matheson of the University of Pittsburgh had testified. The less “meaningful control” users have of their data, the more data Meta has to sell, he said.

On Wednesday’s conference call, Zuckerberg and Li can be heard absolutely salivating at the money to be made this way, as Muse gets marketed toward ubiquity. Li spoke of “monetizing our AI products through subscriptions, transactions, advertising …”

Given those opportunities, do you think Meta will be able to resist the temptation to exploit the private information users give over to Muse in the mistaken impression that it will stay private? Me neither.

A New Mexico judge just issued a remarkable warning for users of Muse, the new AI-powered bot marketed by Meta Platforms: Sign up for this thing at your own risk.

Judge Francis J. Mathew didn’t specifically mention Muse in the blistering findings of facts he issued Wednesday, in which he socked Meta with a $25-billion penalty for its “lies” and “false promises” to protect the privacy of its users and keep their personal data secure.

Mathew laid out the “systematic pattern of deception” about those issues and others that Meta engaged in over more than a decade. Some of those “lies,” as it happens, are very much like the promises Meta has made about the security of Muse.

As recently as Wednesday, during a conference call for investment analysts about the company’s third-quarter financial results, Chief Executive Mark Zuckerberg boasted of the “state-of-the art privacy and security” that Meta has vested in Muse.

The truth is that throughout its history, as I noted recently and Mathew set forth in great detail, Meta has been a serial violator of its users’ privacy. In the past, that has cost the company dearly, though perhaps not enough. In 2019, the Federal Trade Commission hit the company, then known as Facebook, with a record $5-billion fine for violating the terms of a 2011 FTC settlement over privacy practices.

I pointed out then that, as big as the fine appeared to be, the company collected that much in revenue in an average month and more than four times as much in profit in a single year.

Whether the fine prompted the company to change its ways is hard to gauge. The New Mexico jury that on Sept. 25 found Meta guilty of years of deceit pinpointed numerous allegedly deceptive statements that Zuckerberg, his then-deputy, Sheryl Sandberg, and other executives made after the 2019 fine. But those statements generally involved the company’s supposed efforts to cleanse its platform of hate speech, misinformation and incitements to violence rather than claims about privacy protections.

Still, the burden of the jury verdict and Judge Mathew’s order is that Meta can’t be trusted to live up to its promises. Meta’s chief legal officer, C.J. Mahoney, told me by email that the judge’s ruling, along with the state attorney general’s “approach to enforcement … makes it all but impossible to do business in the state of New Mexico.” Mahoney said the ruling “seeks to impose a tax on speech to enforce new rules for what people can say online,” and that the company will appeal.

Meta didn’t respond, however, to my question about whether the ruling will or should shake Muse users’ confidence in Meta’s assurances of privacy protections.

Curiously, the professional investment community treated the $25-billion judgment as a non-story. Zuckerberg and Meta’s chief financial officer, Susan Li, didn’t get a single question about the case from investment analysts during their conference call Wednesday about the company’s third-quarter financial results.

The analysts’ indifference was all the more remarkable because the third-quarter results encompassed a $9.9-billion charge related to Meta’s $17-billion settlement of allegations by 47 states, including California, that it fomented social media addiction among children and teens and collected data on young users without parental consent. (The company didn’t admit to the states’ allegations in settling the case.)

The $25-billion New Mexico penalty, if it stands, could have a greater impact on earnings. Li even warned the analysts that “active legal and regulatory matters … could significantly impact our business and financial results” in the near future.

The $25-billion penalty might bite Meta’s finances more than the FTC’s $5-billion fine in 2019. It’s five times as large, for one thing. Last year, Meta’s annual revenue quadrupled to $201 billion over its 2019 results ($70.1 billion), and its net income roughly tripled to $60.5 billion over the $18.5-billion profit it recorded in 2019.

The broader investment community has not been as sanguine as the investment analysts. Meta shares fell by $48.67 to $648.45 in Thursday’s trading, a loss of 7%, though investors may have been less a reaction to the New Mexico ruling than a reaction to the company’s disclosure that it faces immense capital expenditures in developing its AI-related products such as Muse. Investors are also wary of Meta’s plan to issue new shares that would cement Zuckerberg’s voting control of the company, even if he has to sell shares to cover the California billionaire tax if it wins voter approval next month.

That brings us to the judge’s findings. These were based on the jury’s verdict that Meta committed 43.9 million “willful violations” of New Mexico’s unfair business practices law from May 2010 through mid-August 2021. At the maximum penalty of $5,000 per violation, Meta could have been liable for a penalty of $219.5 billion; the judge, showing compassion, cut that to $25 billion without explaining his reasoning. The state had sought a penalty of up to $40 billion.

Mathew pointed to the company’s obdurate disregard for punishment. “Penalties, consent agreements and decrees have not deterred Meta from using deceptive trade practices,” he wrote. Nor was this a case of a few rogue officials counteracting company policies. They were institutional.

“The violations were not confined to one statement, one speaker, one medium, or one aspect of Facebook’s business,” he found. They were “disseminated through numerous public channels, including Facebook’s own platform and Newsroom, earnings calls, nationally distributed television interviews, nationally distributed print and online media interviews, and public conferences.”

Moreover, the company knew it wasn’t telling the truth, Mathew found. It “continued making public representations concerning users’ control of data, third-party data misuse, misinformation, hate speech, and equal enforcement after employees, researchers, and senior personnel had internally identified that Facebook could not make good on its public promises.”

Evidence presented at trial indicated that insiders told Zuckerberg that “the proposed public communications were misleading.” And the company knew that “ordinary consumers” had no way of verifying that Facebook was telling the truth. When it came to privacy, Mathew found, “Facebook was aware that its users did not understand its privacy settings and took advantage of that to a grossly unfair degree.”

Rather than educate users how to use their privacy settings, the judge wrote, Zuckerberg chose to “capitalize on that lack of understanding in order to manipulate users into sharing more of their personal information publicly.”

“Give them a chance to change their privacy settings but obviously don’t encourage it,” Zuckerberg wrote internally, according to evidence presented at trial.

After the eruption of the Cambridge Analytical scandal in 2018, in which the personal data of as many as 87 million Facebook users had been shared with that British political consulting firm through a third-party app without their knowledge, Facebook promised to investigate all apps with access to user data and ban any found to be misusing the data. As Mathew found, however, Facebook didn’t conduct the investigation it promised — and knew at the time that it didn’t have the ability to take the announced actions.

Facebook’s promises to detect and delete misinformation and hate speech were similarly “deceptive,” Mathew wrote. In fact, “its systems … could be seen promoting this content.”

The New Mexico trial provided a good road map to what Meta’s business plan is all about. It’s about monetizing you, the user. Facebook snarfs up your personal information so it can sell advertising to corporate customers paying to use the data for targeting their ads.

The company “sell[s] everything but your name,” expert witness Colum Matheson of the University of Pittsburgh had testified. The less “meaningful control” users have of their data, the more data Meta has to sell, he said.

On Wednesday’s conference call, Zuckerberg and Li can be heard absolutely salivating at the money to be made this way, as Muse gets marketed toward ubiquity. Li spoke of “monetizing our AI products through subscriptions, transactions, advertising …”

Given those opportunities, do you think Meta will be able to resist the temptation to exploit the private information users give over to Muse in the mistaken impression that it will stay private? Me neither.