tmp10423288442
4 hours ago
A lot of people on this story are making the usual snarky remarks that, oh, this is just a slap on the wrist—some trivial proportion of Meta’s global revenue. And that is true, but unlike the EU, for example, New Mexico is a tiny jurisdiction. It only has a little bit more than 2 million people.
So actually, a fine—or a judgment—of $942 million that applies just to New Mexico is enormous. If you look at Meta’s revenue from the U.S. and Canada and assign it proportionally by population, you find that Meta only earned about $1.5 billion to $2 billion total from New Mexico over the past five years. The exact figure depends on whether you allocate purely by population or account for purchasing power, which makes the estimate a little lower because New Mexico is a poorer state than the U.S. average.
Given that, the judgment is a half to two-thirds of what Meta could have obtained from New Mexico. So it is actually a serious deterrent, assuming Meta thinks New Mexico would continue to impose fines of that size.
I also think that there’s a good chance this judgment gets overturned or significantly reduced on appeal, but even if the fine drops to half its current level, it would be proportionately larger than almost any fine against any company, let alone tech, that I’ve heard of.
tristanj
34 minutes ago
This analysis actually understates how massive and outsized the penalties are. The court ruling only applies to children in New Mexico under age 18.
New Mexico has ~450,000 people under age 18, of which roughly 140,000 are between ages 13-17 (Meta officially requires age 13+ to use their platforms). Recent Pew surveys of U.S. teens ages 13–17 show ~70% of teenagers use Instagram and ~30% use Facebook.
In New Mexico, Instagram and Facebook would have ~100,000 users in the 13-17 group. That's not everyone, some underage users may lie about their age, so add in ~30,000 unauthorized users under age 13. Overall, around 130,000 people in the affected class.
The judge assessed $942 million in total penalties, and dividing that $942 million across 130,000 users equals approximately $7,250 in fines per user.
If this fine remains, and Meta pays out to the affected parties, these kids could end up rewarded with thousands of dollars for just for having a Facebook or Instagram account. Which creates some bizarre incentives, minors get rewarded for signing up for the platforms that are harming them in the first place.
LunaSea
28 minutes ago
Shouldn't you take into account all young adults that were in this age range in the last 10 or 15 years?
tgv
9 minutes ago
> If this fine remains, and Meta pays out to the affected parties
Did you even read the first line of the article? "A New Mexico court has ordered Meta ... to pay $567m into a fund aimed at redressing adverse mental health impacts". It does NOT go to the children's purses. There's also a fine, which --as fines do-- goes to the state. Not to the individual children.
> outsized
Are you arguing it should be less?
nekusar
25 minutes ago
What really sucks about all these types of judgements:
Who's wronged here? The children.
How much do they get for being wronged? Absolutely nothing.
It all just goes to the governments coffers to be wasted away on a few PSAs directed at children.
exe34
21 minutes ago
It's restitution to society, for the cost of the damage done.
shevy-java
11 minutes ago
It is more money for the courts. Not really restitution to society.
Will Facebook change its policies? No.
harimau777
15 minutes ago
How can it be restitution if it doesn't help the victims?
ubercore
2 hours ago
Makes me think of the DuPont settlement with Rhode Island: https://www.law.com/article/almID/900005544259/
As a result, Rhode Island has some great followup and public health programs. It wasn't that much money to DuPont, but it did real good in Rhode Island, and I believe DuPont changed their legal tactics afterwards.
deepsun
4 hours ago
I'm pretty sure Meta will drag the case in appeals for many years until the order becomes irrelevant. Cheaper than paying $942m.
nujabe
3 hours ago
Why would dragging it on make the order irrelevant?
inigyou
3 hours ago
Keep dragging it until there isn't a Facebook any more for unrelated reasons
Joel_Mckay
3 hours ago
A corporation will shift the capital loss to a tax write off like any other firm.
The taxpayer just takes a dollar out of their pocket, and pays a dollar in tax revenue short fall. This fine changes nothing, punishes tax payers, and Meta will just lobby more politicians. =3
jasode
an hour ago
>A corporation will shift the capital loss to a tax write off like any other firm.
The payment of fines for penalties from breaking civil or criminal laws is not deductible according to IRS tax rules : https://www.irs.gov/publications/p529#en_US_202012_publink10...
neonstatic
36 minutes ago
pssst, don't challenge the narrative. The "we hate corporations and billionaires" cult must not be disturbed.
ourmandave
a few seconds ago
pssst, we don't hate corporations and billionaires. We hate organizations and people that knowingly harm children for profit.
Epa095
2 hours ago
You have the right idea, but remember that tax rate is not 100%. So if a company gets a fine on X dollar, that reduces their surplus by X, and they pay e.g X*20% less in tax (if the tax rate is 20%).
Joel_Mckay
2 hours ago
I am sure they will figure something out in whatever jurisdictions they find advantageous. =3
drc500free
an hour ago
Corporations don’t ignore expenses just because they reduce taxable income.
keybored
an hour ago
Sometimes I wonder if these comments are about lamenting the state of big corporations, about defending big corporations, [1] or about lamenting how fungible value exchange were even the Rule of Law can be reduced to an expense makes everyone except for conentrated wealth into losers.
[1] “They won this battle and the last one. But the other side has millions of soldiers. They will just replace them.”
oblio
2 hours ago
LOL. Yes, let's do absolutely nothing, that always works well.
This fine also sets a precedent that some will follow. When New Mexico does it, ok, avoidable. If NY, California, etc start doing it, at some point there is no place left to run to.
Also, what's the "=3" supposed to mean?
dgellow
7 minutes ago
It’s a cat face emoticon
whatarewegonnad
an hour ago
wah!
amelius
an hour ago
I'm hoping the wrist-slapping works in an exponential way versus number of violations.
rrgok
3 hours ago
I don't understand the logic. If I got 1000 from a mentally challenged adult by manipulating them, do I get 200 in fine or should all 1000 get confiscated from me?
inigyou
3 hours ago
How much money did Meta get from mentally challenged adults in New Mexico?
shevy-java
12 minutes ago
No, the fine is still small and thus irrelevant.
It is just the courts milking money here.
IF they want to fix the behaviour of mega-corporation, there must be mandatory jail sentence. When Suckerberg goes into prison for the next 10 years, no way to weasel out, only then will we see a change in the real behaviour of these guys. So your claim that this is more than a slap of a wrist, is really not accurate here.
thibaut_barrere
2 hours ago
Some people tend to forget that you got to start somewhere, and a lot of huge undertakings started this way. Such as Linux ;-
whywhywhywhy
2 hours ago
Must have missed the part of the linux story where a company was extorted for millions of dollars by a government.
Der_Einzige
2 hours ago
Show me evidence that the fine would go down by half instead of by a factor of 10 or more.
bryanrasmussen
33 minutes ago
there is no evidence available on that, perhaps people should go ahead and built it, but in cases such as this if NW thinks it would get a decrease or reversal on appeal it might settle for a lesser amount. I think a 90% decrease seems way too much for anyone to agree to. Frankly if I was NM and I won that much I don't think I would agree to a 50% decrease either, 25% decrease would seem to be a reasonable offer that Meta would have to be crazy not to accept. My opinion, not a lawyer and I have been told I am too aggressive in negotiations too.
on edit: part of reason why there is no evidence of that is in cases like this settlements might be secret, although with a state involved I guess it can't be, but being able to track how much fines actually decreased on appeal etc. and a typology of cases etc. would be nice to have, but also probably impossible to have.