A New Mexico judge ordered Meta Platforms to pay $25 billion to the state on October 21, following a jury verdict that found the company misled consumers about its data privacy practices. The ruling stems from allegations tied to the Cambridge Analytica scandal, in which a political consulting firm harvested personal data from millions of Facebook users without their consent during the 2016 U.S. presidential election.
Judge reduces penalty from $219 billion
New Mexico District Court Judge Francis Mathew issued the order after a jury found Meta liable for 43 million violations of the state’s consumer protection laws. The judge initially calculated a penalty of $219.5 billion based on state law, but reduced it to $25 billion. In his ruling, Mathew stated that the violations were "willful," "systematic," and involved senior leadership, warranting the highest allowable penalty under the New Mexico Unfair Practices Act.
The case originated from a lawsuit filed by New Mexico Attorney General Raúl Torrez in 2021. The state accused Meta of misleading users about who had access to their data, how the company handled hate speech, and whether personal information was shared with third parties. The jury found that 26 of 29 statements made by Meta and its executives on these issues were misleading.
Meta plans to appeal the verdict
Meta’s chief legal officer, C.J. Mahoney, stated the company intends to appeal, calling the ruling "all but impossible to do business in the state of New Mexico." Mahoney argued that the lawsuit sought to "impose a tax on speech" and enforce new rules for online expression. Meta previously stated that a penalty of this magnitude risked violating its constitutional rights to due process and protection from excessive fines.
The penalty is the largest single-state verdict against Meta to date. Under New Mexico’s constitution, fines for consumer protection violations are directed toward state education spending. Torrez noted that the funds could support school construction for decades, though he acknowledged the money would be tied up during the appeal process.
Background: Cambridge Analytica and prior settlements
The case stems from revelations in 2018 that Cambridge Analytica, a British political consulting firm, obtained data from 87 million Facebook profiles via a third-party app. The data was later used to create targeted political advertisements, including for Donald Trump’s 2016 presidential campaign.
Meta previously resolved related lawsuits with 48 other states as part of a $17.1 billion multistate settlement in August 2023, which addressed claims that the company’s platforms harmed teen mental health. New Mexico was not part of that settlement, opting instead to pursue its case independently.
The jury’s findings centered on Meta’s misrepresentations about data privacy controls, including claims that users controlled how their information was shared and that the company did not sell or share personal data with advertisers. The judge ruled that these communications were part of a "coherent strategy designed to mislead the public."
Financial and legal implications
Meta’s shares traded 2% higher following the penalty announcement, as the company reported its quarterly earnings. The company has faced multiple legal challenges in recent years, including a $5 billion penalty from the U.S. Federal Trade Commission in 2019 over the same scandal.
Torrez emphasized that the verdict sends a message to the tech industry: "This judgment should be a signal, an unambiguous message, to Silicon Valley." He added that the case was not just about one company or scandal but about holding corporations accountable for misleading consumers about their personal data.