Meta Ordered to Pay $25 Billion in Landmark New Mexico Consumer Fraud Judgment

A New Mexico judge has ordered Meta to pay $25 billion after a jury found the Facebook parent company misled consumers, adding another enormous legal penalty to the social media giant’s mounting bills. The judgment stems from a lawsuit connected to the Cambridge Analytica scandal, in which the political consulting firm that worked for Donald Trump’s successful 2016 presidential campaign obtained data from millions of Facebook users without their consent. Cambridge Analytica gained access to personal information from as many as 87 million Facebook users through a third-party app, according to Reuters, and used that information to profile and target voters. The New Mexico case, filed in 2021 by state Attorney General Raúl Torrez, accused Meta of misleading Facebook users about who had access to their data, how the company handled hate speech and misinformation posted on its platform, and other internal policies. The sweeping verdict represents one of the largest single-state penalties ever assessed against a company in U.S. history and signals a significant escalation in the legal and regulatory battles facing one of the world’s most powerful technology companies.

The jury in September found that 26 of 29 statements made by Meta and its leadership were misleading and that the company committed more than 43 million violations of New Mexico’s consumer protection laws. Judge Francis Mathew, who oversaw the case, determined that state law warranted a penalty of more than $219 billion but exercised discretion to reduce the award to $25 billion. Under New Mexico law, penalties can reach up to $5,000 per violation, and the state had sought between $35 billion and $40 billion following the verdict. Meta, by contrast, urged the court to limit the penalty to $3.45 billion, arguing that a multibillion-dollar judgment risks violating its constitutional protections against excessive fines and its right to due process. The company has said it plans to appeal, and C.J. Mahoney, Meta’s chief legal officer, expressed confidence that the company would prevail, criticising New Mexico’s approach to the case. The enormous gap between the state’s requested amount, Meta’s proposed cap, and the final judgment underscores the contentious nature of the litigation and the high stakes for both parties.

The judgment dwarfs several of Meta’s previous settlements and regulatory penalties over privacy, user safety, and the handling of personal data, and it is the largest penalty levied against Meta in the wake of the Cambridge Analytica scandal, according to Reuters. New Mexico Attorney General Raúl Torrez described the verdict as one of the largest, if not the largest, single-state verdicts against a company in U.S. history. The jury’s finding of more than 43 million violations was based on the number of Facebook users or New Mexico residents who were the audience for each misleading statement, a calculation method that dramatically increased the potential financial exposure for Meta. The state’s lawsuit had centered on allegations that Meta repeatedly assured users their data was protected while allowing third parties, including Cambridge Analytica, to harvest personal information on a massive scale. The state also accused Meta of failing to adequately police hate speech and misinformation on its platforms, despite public promises to do so. The judge’s decision to reduce the statutory penalty from $219 billion to $25 billion was notable, but the final amount still represents a staggering financial blow and sets a potentially precedent-setting benchmark for how states can hold technology companies accountable for deceptive practices.

The ruling comes less than two months after Meta reached another massive agreement with states over separate allegations involving young social media users. In August, state attorneys general announced a multistate agreement under which Meta could pay up to $17.1 billion to resolve claims concerning harm to young users and implement new child-safety measures on Facebook and Instagram. The precise value of that agreement has been reported differently, and the figure is important because part of the eventual payout depends on the resolution of litigation involving other social media companies. Separately, six states settled lawsuits related to the Cambridge Analytica scandal for a combined $459.2 million, according to Reuters. New Mexico has also pursued separate litigation against Meta involving the safety of young users. In March, a Santa Fe jury ordered Meta to pay $375 million in civil penalties after finding the company had misled users about the safety of young people on Facebook, Instagram, and WhatsApp. Following another phase of that case, a judge in August directed Meta to pay $567 million into a New Mexico fund for teen mental health and ordered the company to implement measures aimed at protecting teen Facebook and Instagram users. Those cases, while substantial in their own right, have now been overshadowed by the $25 billion judgment in the consumer protection case.

Meta’s legal battles over privacy extend well beyond New Mexico, and the company has faced a series of major penalties and settlements at both the federal and state levels over the past several years. In 2019, Facebook agreed to pay a $5 billion penalty to the Federal Trade Commission following an investigation into the company’s privacy practices in the aftermath of the Cambridge Analytica scandal. At the time, that penalty represented an extraordinary financial sanction for the social media company and was seen as a landmark enforcement action by federal regulators. Meta later agreed to pay $1.4 billion to Texas to settle a lawsuit alleging that the company illegally collected biometric information through Facebook’s facial-recognition technology. Texas alleged that Meta captured biometric data from photographs and videos uploaded to Facebook without users’ informed consent, and the company did not admit wrongdoing as part of that settlement. The company has also agreed to a $725 million settlement of a Facebook user privacy class action stemming from the Cambridge Analytica scandal, with the litigation accusing Facebook of improperly allowing third parties access to users’ personal information. Each of these cases highlighted different facets of Meta’s data-handling practices, from biometric privacy to unauthorized data sharing, and together they have cost the company billions of dollars in legal penalties and settlements.

Despite those significant financial hits, Wednesday’s New Mexico judgment dwarfs all of them, underscoring the growing willingness of state attorneys general to take aggressive legal action against technology companies. The $25 billion award, if upheld on appeal, would rank among the largest civil judgments in American history and could have profound implications for how social media platforms operate and communicate with their users. Meta has argued that the judgment is excessive and has vowed to challenge it, with the company’s legal team pointing to constitutional protections against excessive fines and due process violations. The appeal process could take years, and the final outcome remains uncertain, but the ruling already serves as a powerful warning to tech companies that misleading the public about data privacy and platform policies carries enormous financial risk. For New Mexico, the judgment represents a landmark victory in the fight to hold Meta accountable for its actions, and state officials have indicated they intend to continue pursuing the company over issues related to user safety and privacy. As Meta faces a growing array of legal challenges across the country, the New Mexico verdict stands as the most dramatic example yet of the consequences facing the company for its handling of user data and its public representations about the safety and integrity of its platforms.