Meta must pay $25 billion to New Mexico for data violations

A New Mexico judge ordered Meta to pay $25 billion on Thursday for violating the state's consumer protection laws. The ruling represents the largest fine the social media company has faced. Judge Francis Mathew imposed the penalty after a jury found in September that Meta misled users regarding its data handling practices. The legal dispute originated from the Cambridge Analytica scandal, and the state later added claims related to content moderation policies.

Meta has indicated it will appeal the decision. C.J. Mahoney, the company's chief legal officer, stated that the ruling and the attorney general's enforcement style make it "all but impossible to do business in the state of New Mexico." He characterized the lawsuit as an effort to "impose a tax on speech" and expressed confidence that the company will prevail on appeal.

The penalty is part of a series of financial losses for Meta this year. A separate New Mexico jury ordered the company to pay $375 million for child safety violations, with a second phase of that case resulting in an additional $567 million order. In a Los Angeles County superior court case, a judge found Meta and Google-owned YouTube liable for harming a young woman's mental health through addictive app design, awarding her $6 million. Meta also agreed to pay between $17 billion and $18 billion over ten years to settle a federal case brought by most US states over features alleged to harm children.

The $25 billion figure is a reduction from the maximum possible penalty of $219 billion. That maximum was calculated at $5,000 for each of the 43 million violations identified in the case. New Mexico attorneys originally requested a penalty ranging from $35 billion to $45 billion. Despite the size of the fine, Meta's market value remains approximately $1.7 trillion. The company's stock fell on Thursday, driven by a combination of its earnings report, heavy spending on artificial intelligence, and a general decline in AI sector stocks.

Legal experts suggest that financial penalties alone may not be enough to force structural changes. Corban Rhodes, a partner at DiCello Levitt, which represents New Mexico, noted that each case Meta declines to settle places trial evidence into the public record. The New Mexico trial released more than 100 exhibits that had remained secret for over a decade. One such exhibit is a 2018 email from then-COO Sheryl Sandberg, sent days after the Cambridge Analytica scandal emerged. She warned that "there were a MILLION developers with access to the data" and predicted "many, many, many more moments like this in the next month and year."

Pressure may also come from insurers and shareholders. A Delaware judge ruled in March that insurers have no duty to defend Meta against the thousands of lawsuits it faces. Brian Quinn, a Boston College law professor, said the sharpest pressure could occur if shareholders focus on individual directors rather than the company as a whole. Under current indemnification law, executives are protected if they acted in good faith. Quinn noted that if the same individuals appear repeatedly in similar legal findings, shareholders might demand that the company stop covering their legal costs. This would leave Meta's executives with less financial protection.