Is Meta About to Be Fined $24.6 Million?
Is Meta About to Be Fined $24.6 Million?
Today, a “hearing without oral argument” is set to determine how much Meta, formerly known as Facebook, is going to be fined as a result of its 822 intentional violations of Washington State’s uniquely tough law mandating transparency in online political ads.
Will the Seattle judge handing this case “throw the book at Meta,” as The Seattle Times editorial page just demanded?
The answer may arrive later today or… someday soonish. A “hearing without oral argument” simply means that the time for debating the fine amount in front of the judge is now over. Not that the debate hasn’t been interesting! Meta, in a recent court filing, called the $24.6 million fine requested by Washington State Attorney General Bob Ferguson “staggering” and “totally disconnected from the undisputed facts of this case.” The AG’s office, in reply, told the judge it’s “long past time for Meta to be held accountable for its intentional violations of the law,” and said the judge should achieve accountability by “assessing the maximum penalty.”
The Seattle Times editorial page, for its part, thinks even a $24.6 million penalty is too low given Meta’s billions, Meta’s repeated and intentional violations of state law, and Meta’s attempt to “gut”—through a failed constitutional challenge to Washington State’s political ad disclosure requirements—“some of the best campaign finance transparency rules in the country.” But, the The Seattle Times says, $24.6 million “is the maximum that the law allows, and that’s what Washington deserves.”
This inadvertently points at a central question now facing King County Superior Court Judge Douglass North: What, exactly, does the law allow in this case when it comes to fines against Meta?
While we wait for Judge North’s answer, I’ll explain how this question actually launched the AG’s case against Meta more than two years ago, why I initially thought Judge North would deliver a fine far below $24.6 million, why I now think it’s possible the judge could do what The Seattle Times and the AG’s office are hoping, and where the parties pushing for a $24.6 million fine might look for answers if the maximalist fine does not, in the end, materialize.
First, some recent history: Before there was the case of State of Washington v. Meta, there was a long-running state agency investigation into Facebook’s failure to comply with Washington’s political ad disclosure law. That investigation was conducted by the Washington State Public Disclosure Commission (PDC), which is tasked with enforcing state campaign finance law and has its own power to issue fines.
But in February 2020, it came to light that the PDC’s leadership was recommending a pretty sweet deal for Facebook. Although Facebook had, at that point, failed to disclose required information about hundreds of political ads targeting Washington State’s elections, the company, under the 2020 deal proposed by the PDC, would have been able to settle the matter by paying a $75,000 fine, admitting no guilt, and making no binding promises to follow Washington State law going forward.
Experts called the PDC’s proposed settlement “dangerous” and “troubling.” The former chair of the board of commissioners that oversees the agency, Anne Levinson, said the proposed settlement raised “significant concerns” and was not something she would have voted to accept. And when the PDC’s active commissioners voted on the matter, they unanimously rejected the settlement that had been recommended by Facebook and the PDC’s executive director, Peter Frey Lavallee. Instead, the Commissioners referred the matter to Attorney General Ferguson.
That quickly led to Ferguson filing suit against Facebook. After the company’s name-change, Ferguson’s case became State of Washington v. Meta.
And how, exactly, had the PDC come up with a proposed fine of $75,000 for violations that may now result in millions of dollars in fines against Meta?
As a lawyer for Meta pointed out at a September 2 hearing before Judge North, when calculating these fines much depends on whether Meta is fined for each time it failed to fully comply with a request for information about political ads targeting Washington State elections (state law allows “any person” to make such a request), or whether Meta is fined for each time it failed to provide required information about individual political ads covered by those requests.
To make all of that much more concrete: In the present case before Judge North, Meta says 12 requests for political ad information are at issue. But because those requests covered many individual political ads, Judge North has now stated that Meta violated the disclosure law 822 times.
State law allows fines of “not more than ten thousand dollars for each violation.” Those fines may be tripled if the violations are found to be intentional. So if the fine is calculated per request, then Meta, based on the 12 requests number, could be facing $360,000 in fines from Judge North. But if the fine is calculated per ad, then Meta, based on the 822 violations number, could be facing $24.6 million in fines from Judge North.
At the September 2 hearing and in recent filings, Meta has been vigorously pointing Judge North back to the PDC’s $75,000 proposed settlement in 2020, which was calculated on a per request basis.
What’s more, Meta argues that the 2020 proposed settlement was drafted in consultation with a lawyer from the AG’s office who was assigned to the PDC. As a Meta attorney put it at the September 2 hearing before Judge North, that 2020 draft settlement involved advice given to the PDC “by an assistant attorney general, signed under the name of the attorney general himself, saying that the violation in this case is request-based, not ad-based.”
After that advice from an assistant AG was given, the fine in the proposed 2020 settlement was indeed calculated by the PDC on a per request basis. The agency decided there were two requests at issue and then, using flexibility state law allows for fining above the $10,000 limit when settlements are involved, the PDC effectively set the proposed 2020 fine amount at $37,500 per violation. Multiply $37,500 by two violations and you get the PDC-proposed, Commissioner-rejected fine of $75,000.
So does all of this mean Ferguson is contradicting himself by today asking for $24.6 million in per ad fines against Meta?
No, says the AG’s office. In a footnote in a filing earlier this month, it wrote:
Meta misleadingly asserts in its Objections that the Attorney General’s Office (AGO) itself previously conceded that violations accrue on a per request basis, not a per advertisement basis.
Neither the AGO “itself” nor the State has ever taken that position. Rather, as explained in the State’s previous briefing, Meta references a proposed stipulation and recommendation that was rejected by the PDC, the latter of which was prepared by an assistant attorney general charged with representing the PDC staff (not the State, nor the AGO, or even the Commission itself).
Translation: The per request advice the PDC’s executive director ran with in 2020 is not the per ad position of Attorney General Ferguson today.
What’s likely to be the position of Judge North on this particular issue? I initially thought the judge was heading in a per request direction because of what he said at the September 2 hearing. According to copies of the hearing transcript filed in this case, Judge North said:
I do think that Meta is clearly in violation of the rule. I do think, however, that it has to be limited to — for any enforcement penalties and so on — have to be limited to the requests that are actually made of Meta.
However, when Assistant Attorney General Todd Sipe followed up and asked Judge North if he’d just issued a firm ruling on the per-request vs. per-ad question, Judge North replied:
I — I think it's — unless you can — I mean, maybe I'm missing something that you can…
The judge didn’t finish that sentence, but he’d earlier indicated he wanted new filings from the parties before issuing any fine.
Then, earlier this month, Judge North issued an order indicating that he sees Meta as having committed 822 intentional violations in this case. Does that mean Judge North will multiply 822 violations by $10,000 and then triple that amount (for the intentionality of the violations), in order to come up with the $24.6 million fine sought by the state and The Seattle Times editorial page?
I don’t know. But if the fine amount that the AG’s office and the Seattle Times editorial page are looking for doesn’t materialize, there will likely be questions as to why. (Especially if the fine ends up being 12 unfulfilled requests x $10,000 x 3 = $360,000—an amount far lower than even the $3.3 million in attorney fees the state is asking Judge North to order Meta to cover.)
If there do end up being questions about a relatively low fine in State of Washington v. Meta, the answers may lie in what happened in 2020 at the PDC, as well as in the current $10,000 fine limits. And who has the power to change the current $10,000 fine limits for an era in which political ads run on platforms worth hundreds of billions of dollars?
The PDC can recommend the legislature make such changes. So can the AG’s office. And so can The Seattle Times editorial board.