Meta to pay record $25 billion to New Mexico over data privacy claims

New Mexico courts have ruled on a long-running data privacy dispute involving the tech giant Meta. A judge ordered the company to pay $25 billion to the state this week. This is the largest fine Meta has ever faced.

The state filed the lawsuit in 2021. It alleged that Meta broke the New Mexico Unfair Practices Act. The company allegedly misled users about how it handled their data. This dispute traces back to the Cambridge Analytica scandal. The attorney general later added claims regarding content moderation policies. A jury sided with the state in September. The penalty followed that verdict.

Meta has said it will fight the outcome. C.J. Mahoney, the company's chief legal officer, criticized the ruling. He stated that the attorney general's approach makes it "all but impossible to do business in the state of New Mexico." He described the lawsuit as an attempt to "impose a tax on speech." He said the company is "confident we will prevail on appeal."

This fine is one of several legal setbacks for Meta this year. A New Mexico jury earlier ordered the company to pay $375 million for child safety violations. A second phase of that case produced a $567 million order. A Los Angeles court also awarded a young woman $6 million for mental health harm caused by addictive app design. Meta must cover most of that sum. In August, Meta settled a federal case over child safety features. It agreed to pay between $17 billion and $18 billion over 10 years.

The $25 billion penalty is small compared to the company's size. Meta is valued at roughly $1.7 trillion. The state originally asked for $35 billion to $45 billion. The maximum possible penalty was $219 billion. That amount was calculated at $5,000 for each of 43 million violations. Judge Francis Mathew reduced the final figure to $25 billion. Meta's shares fell on Thursday. The drop reflected its earnings report and heavy AI spending.

Legal experts suggest that financial pressure alone may not force change. Corban Rhodes is a partner at DiCello Levitt, the firm representing New Mexico. He noted that each trial puts evidence on the public record. The New Mexico trial placed more than 100 exhibits in the public domain. This material had been kept secret for over a decade. One exhibit is a 2018 email from then-COO Sheryl Sandberg. She wrote that "there were a MILLION developers with access to the data." She warned of "many, many, many more moments like this in the next month and year."

Insurers may also become a source of pressure. A Delaware judge ruled in March that insurers have no duty to defend Meta against its many lawsuits. Some experts argue insurers could make responsible design a condition of coverage. Brian Quinn, a Boston College law professor, said pressure could come from shareholders. He noted that if the same directors appear in repeated litigation, shareholders might demand the company stop indemnifying them. That would leave executives less protected.

Rhodes expects the next wave of litigation to center on AI. He noted that regulators and courts have focused on the effects of earlier social media eras. Meta's legal troubles are unlikely to end soon. The company is not expected to collapse from penalties alone.