A New Mexico judge has ordered Meta to pay $25bn over deceptive practices related to Facebook user data, the largest fine ever imposed on the company. The ruling follows a two-week trial earlier this year that found Meta spent more than a decade misleading the public about how it handled user information.
Judge Francis Mathew said Meta’s violations were “willful” and spanned from 2010 to 2021. According to the judge, senior executives, including Mark Zuckerberg, engaged in communications “designed to mislead the public” about data sharing and enforcement of content policies. The violations totaled more than 40 million breaches of state law, affecting New Mexico’s roughly two million residents.
The lawsuit stemmed from Meta’s involvement in the Cambridge Analytica scandal, where data from millions of Facebook users was exploited for political consulting in the 2016 US Presidential election, which brought Donald Trump to office. New Mexico also accused Meta of deliberately misrepresenting how it benefited from content containing hate speech and how it enforced rules against such content. A jury agreed that Meta had intentionally misled the public on these points as well.
Meta’s chief lawyer CJ Mahoney said the ruling made it “all but impossible to do business in the state of New Mexico” and announced the company’s plans to appeal, which he predicted would succeed. Mahoney also described the lawsuit as an attempt “to impose a tax on speech to enforce new rules for what people can say online.”
New Mexico Attorney General Raúl Torrez said on Wednesday, “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.”
The original penalty calculation, based on thousands of violations, was $219bn, but Judge Mathew reduced it to $25bn, roughly equal to Meta’s quarterly profits. The state had sought fines up to $40bn, while Meta argued that anything above $3.4bn would be unconstitutional.
This fine surpasses the $18bn agreement Meta reached with California earlier this year over child safety, and follows a $5bn fine imposed by the US Federal Trade Commission in 2019 for data privacy violations. New Mexico has been among the company’s most persistent legal opponents, having also fined Meta nearly $1bn this year for misleading the public about the safety of its platforms for children.
The judge in that case compared Meta to an industrial polluter, citing “psychological harm and sexual exploitation of children” as the type of pollution caused by the company’s platforms.
Despite these large fines, Meta is investing heavily in artificial intelligence (AI). Zuckerberg told financial analysts that Meta’s consumer-facing AI tool Muse has attracted 10 million users, with plans to expand its reach to billions.
Meta expects to spend between $135bn and $145bn on AI projects this year alone. This spending has pushed the company into negative cash flow territory, losing more than $2bn in cash after operational and investment costs for the first time since its public listing 14 years ago.
The company’s revenue grew 26% in the July-to-September quarter compared to a year earlier, reaching $64.5bn. Profits tripled to $9.8bn over the same period.
Meta’s chief financial officer, Susan Li, announced a new stock split during the earnings call. Existing shareholders will receive one additional non-voting share. Li said the new stock class was not yet earmarked for a specific investment but suggested it could provide “more funding flexibility” in 2027, potentially related to ongoing AI expenses.
According to Joy Online.
