New Mexico judge orders Meta to pay $25 billion in data case

A state judge in New Mexico has ordered Meta to pay $25 billion for violating the state's consumer protection laws. The ruling, issued by Judge Francis Mathew, marks the largest fine imposed on the company to date. The penalty stems from a jury verdict in September that found Meta misled users about their data handling practices.

The legal dispute began in 2021 when the state attorney general filed a lawsuit alleging Meta broke the Unfair Practices Act. The case traces its origins to the Cambridge Analytica scandal. During the trial, the state added claims regarding Meta's content moderation policies. The jury sided with the state, leading to the multibillion-dollar judgment.

Meta has announced it will appeal the decision. C.J. Mahoney, the company's chief legal officer, criticized the ruling and the enforcement approach. He stated that the outcome makes it "all but impossible to do business in the state of New Mexico." Mahoney described the lawsuit as an attempt to "impose a tax on speech" and expressed confidence that Meta will prevail on appeal.

This judgment adds to a series of legal financial setbacks for Meta this year. A New Mexico jury previously ordered the company to pay $375 million for violating the same law in a child safety trial. A second phase of that case resulted in an additional $567 million order. In Los Angeles, a superior court found Meta liable for harming a young woman's mental health through addictive app design, awarding her $6 million. In August, Meta agreed to pay between $17 billion and $18 billion over 10 years to settle a federal case brought by most U.S. states regarding features alleged to harm children.

Despite these sums, the $25 billion fine remains a small fraction of Meta's total value. The company is currently valued at approximately $1.7 trillion. The fine represents about 1.5% of that figure. Originally, New Mexico attorneys requested between $35 billion and $45 billion. The maximum possible penalty, based on 43 million violations, was $219 billion. Judge Mathew reduced this amount to the final $25 billion figure.

Legal experts suggest that financial penalties alone may not force immediate changes in company operations. Corban Rhodes, a partner at DiCello Levitt, which represents New Mexico, noted that trial evidence becomes public record when cases are not settled. The New Mexico trial placed more than 100 exhibits on the public record, including a 2018 email from then-COO Sheryl Sandberg. In that email, Sandberg warned of "many, many, many more moments like this" following the Cambridge Analytica scandal.

Other pressures may emerge from insurers and shareholders. A Delaware judge ruled in March that insurers have no duty to defend Meta against thousands of lawsuits. Brian Quinn, a Boston College law professor, indicated that shareholders might eventually demand the company stop indemnifying individual directors and officers if they repeatedly appear in similar legal facts. This could leave Meta's executives with less protection under current law.