One of the biggest courtroom defeats in the history of Big Tech landed this week. A judge in the US state of New Mexico has ordered Meta Platforms, the parent company of Facebook and Instagram, to pay $25 billion after finding that the company systematically misled users about the privacy of their data. It is one of the largest financial penalties ever imposed on a technology giant, and it revives one of Silicon Valley’s darkest chapters: the Cambridge Analytica scandal.
The order, issued on Wednesday by State District Court Judge Francis J. Mathew, follows a jury verdict last month that found Meta violated New Mexico’s Unfair Practices Act more than 43 million times. The judge said a penalty of more than $219 billion was technically warranted under state law, but he reduced the figure to $25 billion, a number still staggering enough to rank among the largest corporate penalties in American history.
What the court found
The case goes back to revelations that shocked the world in 2018. Facebook disclosed that a British political consulting firm, Cambridge Analytica, had harvested the personal data of as many as 87 million users through a third-party app. The firm, now defunct, had worked for Donald Trump’s 2016 presidential campaign and used the data for voter profiling and targeted political advertising.
New Mexico sued Meta in 2021, accusing it of lying to users about who had access to their data and how the company handled hate speech and misinformation. Prosecutors argued that Meta knew third parties had broad access to users’ personal information, and tolerated harmful content when doing so benefited the bottom line.
Judge Mathew did not hold back. “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 wrote in his order. He added that Facebook had promised users that they controlled their data, and that this promise was false.
Meta says it will appeal
Meta wasted no time pushing back. The company’s chief legal officer, C. J. Mahoney, said Meta is confident it will win on appeal and accused the attorney general of confusing privacy issues with speech issues.
“This ruling makes it all but impossible to do business in the state of New Mexico,” Mahoney said in a statement. “At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online.”
New Mexico Attorney General Raul Torrez struck a very different tone. Calling the award one of the largest financial penalties against a corporation in US history, he said at a news conference that the judgment should send “an unambiguous message to Silicon Valley” that states will hold tech companies accountable.
Investors are watching, not panicking
For a penalty of this size, the market reaction was surprisingly calm. Meta’s shares were trading about 2% higher in the immediate aftermath of the ruling, and the company was scheduled to report its quarterly earnings later on Wednesday. Investors appeared to bet that the final bill would shrink substantially on appeal, a common pattern with mega-penalties. It previously paid a $5 billion penalty to the US Federal Trade Commission in 2019 over the same scandal, and six other states settled their own related lawsuits for $459.2 million.
Why this matters beyond one state
The ruling is a milestone for state-level privacy enforcement. Most of the big action against tech giants has come from federal regulators and the European Union, but New Mexico’s case shows that individual states can now deliver verdicts measured in tens of billions of dollars under their own consumer protection laws.
Legal experts say the decision could encourage other states to take similar action. For Meta, the New Mexico judgment is another reminder that its legal exposure keeps growing even as its business keeps expanding.
FAQs
Why is the fine so large?
The jury found more than 43 million separate violations of New Mexico’s consumer protection law. State law sets steep penalties per violation, and the judge said the total warranted was actually over $219 billion before he reduced it to $25 billion.
Will Meta actually pay $25 billion?
Probably not the full amount. Meta has said it will appeal, and large verdicts are often reduced during the appeals process. But the company will spend years in court before the final number is settled.
What exactly did Meta do wrong, according to the court?
The court found that Facebook systematically misled the public about who could access users’ data and how much control users really had, in connection with the Cambridge Analytica data harvesting scandal.
How does this compare to the 2019 FTC fine?
The Federal Trade Commission fined Meta $5 billion in 2019 over Cambridge Analytica. The New Mexico ruling is five times larger, making it one of the biggest corporate penalties in US history.
What happens next?
Meta will appeal the ruling, a process that could take years. Other states may also look closely at the case as a template for their own enforcement actions.
This one is far from over, and the final bill could look very different after appeals. Stay tuned to Informeia for the latest on the case and what it means for data privacy.
