Judge orders Meta to pay New Mexico $25 billion for data violations

A New Mexico judge ordered Meta Platforms Inc. on Thursday to pay $25 billion for violating state consumer protection laws. This penalty marks the largest fine the company has faced in its history. The ruling concludes a legal dispute that began in 2021 and traces its origins to the Cambridge Analytica scandal.

The state of New Mexico alleged that Meta misled users about how it handled their data, breaking the state's Unfair Practices Act. The attorney general later expanded the claims to include the company's content moderation policies. A jury found in favor of the state in September, leading to the multibillion dollar penalty now set by Judge Francis Mathew.

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

This judgment is part of a series of legal setbacks for Meta during 2026. Earlier this year, a New Mexico jury ordered the company to pay $375 million for violating the same law in a trial related to child safety. A second phase of that case resulted in a $567 million order. In a separate matter, a Los Angeles County superior court found Meta and YouTube liable for harming a young woman's mental health through addictive app design, awarding her $6 million.

Meta also settled a federal case in August that was brought by most U.S. states. The company agreed to pay between $17 billion and $18 billion over ten years over features alleged to harm children. Despite these cumulative costs, the sums remain modest compared to the company's financial scale. Meta is currently valued at approximately $1.7 trillion.

New Mexico attorneys originally requested a penalty between $35 billion and $45 billion. The maximum possible penalty was $219 billion, calculated at $5,000 for each of the 43 million violations. Judge Mathew reduced this figure to $25 billion. Meta's shares fell on Thursday, a drop that reflected a mix of factors including its earnings report and heavy spending on artificial intelligence.

Legal experts suggest that financial penalties alone may not be sufficient to drive change. Corban Rhodes, a partner at DiCello Levitt, the firm representing New Mexico, noted that each case Meta declines to settle places trial evidence before the public. He said the New Mexico trial put more than 100 exhibits on the public record, including material kept secret for over a decade.

One exhibit is a 2018 email from then-COO Sheryl Sandberg, written days after the Cambridge Analytica scandal broke. She stated that the biggest issue was that "there were a MILLION developers with access to the data," and warned of "many, many, many more moments like this in the next month and year."

Pressure may also come from insurers and shareholders. In March, a Delaware judge ruled that insurers have no duty to defend Meta against the thousands of lawsuits it faces. Some experts argue insurers could make responsible design a condition of coverage. Brian Quinn, a law professor at Boston College, said shareholders might demand that the company stop indemnifying directors and officers if the same people keep appearing in the same set of facts. This would leave Meta's executives less protected against liability.

Regulators and courts have focused on the effects of earlier social media eras. Rhodes expects the next wave of litigation to center on artificial intelligence. Meta's legal troubles are unlikely to end soon, and the company is not expected to collapse from penalties alone.