Meta faces $35M judgment for campaign finance violations in Washington state

(CN) — The Washington state Court of Appeals ruled Monday that Meta intentionally violated the state’s campaign finance law a whopping 822 times, affirming a lower court’s $35 million judgment against the company.

“This significant penalty is appropriate for a multinational corporation that intentionally violated our law and, instead of accepting responsibility, sought to gut our best-in-the-nation campaign finance law,” Washington state Attorney General Bob Ferguson said in a statement.

Under the state’s Fair Campaign Practices Act, social media platforms are required to maintain records of the political ads hosted on their sites, such as the cost and sponsor of the ad and information about ad targeting and reach.

Meta, the parent company of Facebook and Instagram, allows advertisers to target their ads to certain demographics and maintains an ad library. Despite the ad library, several Washington residents reported to Ferguson that the company wasn’t providing complete information about political ads in response to their requests.

In 2020, the state sued Meta for violating its campaign finance law in King County Superior Court, and the court agreed with the state. Finding that Meta violated the law 822 times, the trial court imposed the $10,000 statutory maximum for each violation but tripled it since the violations were intentional — leading to a grand total of $24.66 million in penalties owed to the state. The trial court also trebled the $3.5 million in attorney fees and costs to $10.5 million.

On appeal, Meta argued the law was unconstitutional. The appellate court was not persuaded.

“Meta fundamentally mischaracterizes the two main aims of [Washington’s campaign finance laws,] namely, recordkeeping and disclosure,” Judge Michael Diaz wrote in a 75-page opinion, with Judges David Mann and Cecily Hazelrigg concurring.

Specifically, the panel found Meta’s arguments failed because the disclosure law is “content-neutral and nonpartisan,” merely requiring the company to categorize its ads to facilitate inspection rather than “publish, withdraw, postpone or alter content.”

The law narrowly focuses on ads related to campaigns and candidates, which the panel said allows the company to crosscheck identified political ads with “easily searchable lists” of candidates, elected positions and ballot initiatives.

“The disclosure law does not treat Meta as a publisher of political ads, impose liability for the content of individual ads, or truly require Meta to monitor ads,” Diaz wrote. “Instead, it imposes liability for Meta’s own conduct; failure to identify, preserve, and disclose political ads and some of its underlying data.”

Meta also challenged the trial court’s significant civil penalty and award of attorney fees and costs, arguing the court miscalculated its violations, was wrong to impose the maximum penalty and improperly trebled damages.

“These arguments are unpersuasive,” Diaz wrote.

The panel noted the language of the disclosure law’s penalty provision is highly discretionary.

“Meta offers no authority that a trial court must credit any particular factor under the disclosure law or announce on the record how it was weighing its decision vis-à-vis the factors,” Diaz wrote. “We decline the invitation to create such a requirement here.”

The panel agreed with the trial court, which found that Meta “didn’t really make a significant effort to try and comply, either in terms of providing any targeting information, which is clearly required by the law, or in terms of making a serious attempt to comply in a timely fashion” and noted that the company has a history of repeated violations.

The state previously sued Meta over its ad disclosures in 2018 after two members of the public were unable to access information about political ads on its platforms and the company entered into a stipulated judgment agreeing to pay $200,000. The company later announced it would stop accepting ads related to the state’s electoral campaigns, but ads continued to appear on its platforms and in its ad library.

“Meta repeatedly and intentionally violated Washington campaign finance law,” Ferguson said.

The Court of Appeals granted Ferguson’s request that the company pay the office’s costs for the appeal. The penalties will go to the state Public Disclosure Transparency Account, as required by law.

Meta did not respond to a request for comment before press time.