Meta Ordered to Pay $25 Billion in New Mexico Privacy Case

A New Mexico judge has mandated that Meta Platforms pay the state $25 billion following a jury verdict that the company misled users about the privacy of their data. This ruling represents one of the largest financial penalties ever imposed on a U.S. corporation.

The lawsuit originated from accusations tied to the Cambridge Analytica scandal, in which the British political consulting firm reportedly accessed personal information from millions of Facebook users without their permission. New Mexico's lawsuit charged Meta with deceiving its users about who could access their information.

Judge Francis Mathew, issuing the order more than three weeks after the jury's decision, stated that Facebook's misconduct was central to the company’s business model and had been ongoing for years. Initially, the judge determined that the penalty should exceed $219 billion under state law but ultimately lowered it to $25 billion.

Meta’s chief legal officer, C.J. Mahoney, responded to the ruling, expressing confidence that the company will succeed on appeal. Mahoney criticized the approach taken by New Mexico's Attorney General, suggesting that it effectively imposes a tax on free speech and complicates the ability to conduct business within the state.

New Mexico Attorney General Raúl Torrez described the penalty as one of the largest ever levied against a corporation in the United States. This case adds to previous legal challenges Meta has faced, including a $5 billion fine imposed by the Federal Trade Commission in 2019 related to Cambridge Analytica. Additionally, six other states settled similar lawsuits against Meta for a total of $459.2 million as part of a broader $17.1 billion multistate agreement addressing claims that Meta's platforms harmed teenage mental health.

The lawsuit was filed by New Mexico’s attorney general in 2021 after evidence emerged showing Cambridge Analytica had collected data from as many as 87 million Facebook users through a third-party application. The state alleged that Meta knowingly misled users about data access and failed to appropriately manage hate speech and misinformation on its platform, prioritizing profit over user safety.

Cambridge Analytica, which has since ceased operations, used the harvested data for voter profiling and targeted political advertising. Torrez remarked at a press event in Albuquerque that this ruling marks a significant moment in holding major technology companies accountable and signals the state's commitment to protecting its residents and consumers.

The timing of Judge Mathew’s decision coincides with growing scrutiny of Meta, which is currently facing thousands of lawsuits and congressional inquiries concerning the effects of Instagram and Facebook on adolescent mental health. Another trial addressing these issues is scheduled to start soon.

Earlier in the year, New Mexico secured nearly $1 billion through two trials against Meta, citing the company’s role in facilitating sexual exploitation on its platforms and misleading users about safety measures.

Industry analyst Gil Luria of D.A. Davidson & Co labeled the recent penalty as expensive but unlikely to have a major impact on Meta’s market value, noting the company’s estimated worth of nearly two trillion dollars and its tendency to appeal legal decisions.

During the September trial, a jury found Meta and its executives responsible for 26 false statements regarding data privacy and content moderation. The cumulative effect was estimated to involve over 43 million violations of New Mexico’s consumer protection laws.

At an October 1 hearing, New Mexico’s legal representative, Randi McGinn, requested a penalty between $35 billion and $40 billion, emphasizing the need for a financial consequence that would resonate with Meta's corporate interests.

Meta had urged the court to limit the penalty to $3.45 billion, arguing that the company does not sell user data and that the state failed to prove any actual consumer deception.

This case reflects broader concerns about data privacy, corporate responsibility, and the regulation of technology companies in the digital age. As Meta prepares to challenge the decision, the outcome may set important precedents for how social media platforms manage user data and address misinformation.