New Mexico Judge Orders Meta to Pay $25 Billion Fine Over Misleading Data Privacy Claims

A state judge in New Mexico has ordered tech giant Meta Platforms to pay $25 billion following a trial that concluded the company spent over a decade intentionally misleading consumers regarding Facebook user data privacy, third-party access, and internal content policies.

The ruling, issued by Judge Francis Mathew, stems from a 2021 lawsuit filed by New Mexico Attorney General Raúl Torrez following the Cambridge Analytica scandal, where the political consulting firm harvested personal data from millions of Facebook users during the 2016 US presidential election cycle. On September 25th, a jury found Meta lied to the public in 26 of 29 challenged executive statements between 2010 and 2021, including a 2010 op-ed by CEO Mark Zuckerberg asserting user data was never sold.

Calculating that state residents were exposed to misleading statements more than 43 million times, Judge Mathew noted that while state law supported a fine exceeding $219 billion, he chose to reduce the final penalty to $25 billion.

In his written order, Judge Mathew emphasized the nature of the infractions:

"Facebook’s wrongdoing – over the course of years and systematically broadcast to the public – goes to the heart of Facebook’s core business practices."

He added that communications between senior executives were "designed to mislead the public" regarding how user data was controlled and shared.

Celebrating the outcome, New Mexico Attorney General Raúl Torrez called the judgment one of the largest single state verdicts against a corporate entity in U.S. history:

"For too long, powerful technology companies have operated as though their size and influence put them beyond the reach of the law. Today's result makes clear that no corporation is too powerful to be held accountable."

He added that the outcome "should be a signal, an unambiguous message, to Silicon Valley".

Meta has strongly contested the ruling and announced plans to challenge both the jury verdict and the resulting financial penalty in higher courts.

CJ Mahoney, Meta's chief legal officer, argued that the decision creates an unsustainable operational environment within the state:

“This ruling, and the Attorney General’s approach to this enforcement, makes it all but impossible to do business in the state of New Mexico. At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online.”

Legal scholars note that Meta's appeal will likely focus on whether the state established direct financial harm or proven reliance by individual residents for each counted violation, as well as constitutional protections against excessive fines.

Legal experts commented on the vulnerability of the verdict on appeal:

• Peter Ormerod (Villanova University Law Professor): "The most vulnerable basis on appeal is going to be the question about whether a violation is going to count, even in the absence of any proof that a particular person saw one of these misrepresentations or relied on them to their detriment,"
• Eric Goldman (Santa Clara University School of Law Professor): "It felt like there was a lot of duplicative counting in the calculations," noting, "How many times can a single person be duped by the same entity?"

On the other hand, corporate accountability advocates praised the decision. Nidhi Hegde, Executive Director of the American Economic Liberties Project, highlighted Meta's ongoing rollout of its consumer AI assistant, Muse, stating:

“Right now, they are rolling out Muse, an AI assistant encouraging people to trust it with everything from their bank accounts to their medical information. Which is why we need more enforcers with courage and laws with actual teeth to rein them in.”

The $25 billion judgment arrives amidst a wave of legal and financial pressures for the social media giant:

• Ongoing Youth Safety Litigation: Meta faces an ongoing federal trial in California brought by a coalition of state attorneys general over platform addictiveness and child data collection, following a $17 billion multistate settlement reached in August.
• Prior New Mexico Penalties: Earlier this year, New Mexico secured nearly $1 billion in penalties against Meta across two separate trials addressing platform safety for minors.
• Accelerated AI Spending: Despite reporting $64.5 billion in quarterly revenue and $9.8 billion in profit, Meta projects spending up to $145 billion this year primarily on AI infrastructure, resulting in a quarterly negative cash flow exceeding $2 billion.