- New Mexico court ordered Meta to pay $25 billion.
- Judge found 11 years ‘willful’ deception; Meta appeals.
- This largest Meta fine comes amidst significant AI investments.
Meta has been handed the largest penalty in its history, after a New Mexico judge ruled that the company spent years misleading the public about how it handled the data of Facebook users. The court on Wednesday ordered the owner of Facebook, Instagram and WhatsApp to pay $25 billion.
The company’s response was swift. Meta’s head lawyer, CJ Mahoney, said the ruling made it “all but impossible to do business in the state of New Mexico”, and that Meta would appeal, a challenge he said would succeed, reported BBC.
Zuckerberg Emails “Designed to Mislead”, Says Judge
The order follows a two-week trial earlier this year. Judge Francis Mathew found that Meta’s violations of the law and its misrepresentations about how Facebook data was used and shared were “willful”, spanning “more than 11 years” from 2010 to 2021. Communications between senior executives, Mark Zuckerberg among them, were “designed to mislead the public”, he wrote in his order.
The judge said the deception was not confined to data handling. “The lies extend beyond Facebook’s data practices as well,” he said, adding that they went to “the heart of Facebook’s core business practices”.
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Judge Cuts Meta Penalty From $219 Billion to $25 Billion
The full penalty, calculated on thousands of violations of state law, came to $219 billion, but Judge Mathew reduced it to $25 billion. The state’s lawyers had sought up to $40 billion, while Meta argued that anything above $3.4 billion would be unconstitutional.
The jury had earlier found that Meta violated state laws more than 40 million times. State lawyers argued that the company’s conduct affected the entire population of New Mexico, roughly two million people.
Facebook Data Claims Cover Two Million New Mexicans
The lawsuit grew out of the role Meta, then still trading as Facebook, played in what became known as the Cambridge Analytica scandal. That firm used data from millions of Facebook users in its political consulting work, including work linked to the 2016 US presidential election, which saw Donald Trump elected for the first time.
New Mexico’s lawyers took issue with a long run of statements by Meta executives that user data was never shared with, or accessed by, third parties without a user’s permission, when in reality it had been.
The state also accused the company of deliberately misleading the public over how it profited from content that included hate speech, and over how its rules against such content were enforced. The jury found Meta had intentionally misled the public on those claims too.
Meta Calls Lawsuit “Tax on Speech”
Meta disputed those accusations. Mahoney said that “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 Raúl Torrez struck a different note. “For too long, powerful technology companies have operated as though their size and influence put them beyond the reach of the law,” he said on Wednesday, adding that the result “makes clear that no corporation is too powerful to be held accountable”.
Meta Fines in 2026: $18 Billion California Deal, $1 Billion New Mexico
The New Mexico penalty is the largest to date against Meta, which has been fined or agreed to settle several lawsuits this year, including an $18 billion deal with California over child safety. New Mexico has been among its most prominent opponents in court: earlier this year, the state fined Meta almost $1 billion for misleading the public about the safety of its platforms for children. The judge in that case likened Meta to an industrial polluter, its pollution being “the psychological harm and sexual exploitation of children”.
The latest penalty also follows a $5 billion fine imposed by the US Federal Trade Commission in 2019 over the company’s data privacy practices.
Zuckerberg Says Muse AI Has 10 Million Users
Large as the penalties are, Meta is spending far more on infrastructure as it tries to catch up with rivals in the artificial intelligence race. The company expects to spend at least $135 billion this year, mostly on AI projects, and possibly as much as $145 billion.
On a call with financial analysts, Zuckerberg said Meta’s consumer AI tool, Muse, was already being used by 10 million people. “Growing Muse to serve billions of people is both our mission and our strategy,” he said.
According to a BBC review of its past financial documents, Meta reported negative cash flow of more than $2 billion, apparently a first since it listed on the stock market 14 years ago. Cash flow is the money a company keeps after paying for operations and investments, which means Meta is currently spending more than it brings in, even as revenue is at a record level.
Revenue for July to September rose 26% from a year earlier to $64.5 billion, while profits tripled to $9.8 billion. Even so, the company plans to keep investing in AI.
Chief financial officer Susan Li announced a new stock split on the call, under which existing shareholders will receive one new share of non-voting stock. Li said the new class was not tied to a specific investment, but pointed to continuing AI-related costs and said the company could use “more funding flexibility” next year.
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