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Meta was hit with a $25 billion penalty on Wednesday when a judge in New Mexico found the company had misled users about data privacy practices. The decision marks one of the steepest corporate payouts ever levied against a technology company.
Under the ruling, Meta, which owns Facebook, Instagram and other platforms and services, was ordered to pay the fee for misleading social media consumers about their data privacy in a case dating back to Cambridge Analytica’s privacy violations involving the 2016 presidential election. The ruling against Meta imposed civil penalties for violating New Mexico’s Unfair Practices Act after a jury trial found Facebook liable for nearly 44 million violations of that law.
Meta could appeal the verdict; it was unsuccessful in its filings to cap its penalties at $3.45 billion. It could have been worse for the company. Some estimates had suggested it could have been hit with $219 billion in penalties.
A representative for Meta didn’t immediately respond to a request for comment.
“A New Mexico jury found nearly 44 million violations of our consumer protection statute, and this penalty order demonstrates that those violations carry real consequences,” New Mexico Attorney General Raúl Torrez said in a statement. “Today’s result makes clear that no corporation is too powerful to be held accountable.”
Meta previously paid $725 million to users to settle a lawsuit over Cambridge Analytica, a high-profile scandal in which a British consulting firm working with the Donald Trump presidential campaign was given access to Facebook user data. That data purchase is credited with helping sway the 2016 election results.
Just two months ago, the company settled with multiple US states to the tune of up to $18 billion for intentionally designing its social media platforms to be addictive and harmful to children and teens. Before that, Meta had especially bad luck in a previous New Mexico case, with orders to pay $375 million in March, then another $567 million in August over failures to warn the public about the dangers its social media platforms, including Instagram, pose to children.
Unbowed and unbothered?
But, surprisingly, Meta’s gigantic payouts (never mind its mountain of legal fees) haven’t turned one of the world’s largest tech companies into a meek player in social media or in news cycles.
Almost weekly, the company is taken to task for privacy-related overreach, most recently over its Muse agentic AI platform and its hit hardware product, Meta Glasses.
Just this week, the company suspended a feature for sharing Muse conversations after researchers found that the links it generated could be accessed by people who weren’t meant to receive them.
Meta has also been fending off cycles of outrage over whether it will add potentially intrusive facial-recognition features to software in its smart glasses. In September, reports surfaced that Meta is at least partially acknowledging the backlash by working on models that don’t include cameras. But those would be in addition to all of the versions of Meta Glasses that still carry them.
Assuming the verdict in New Mexico stands, Meta may pay a large penalty. But it’s unlikely that the case will directly impact its newer business ventures other than serving as a lesson on how not to treat user data on Facebook. The New Mexico case still hasn’t determined what changes, if any, Meta will need to make to comply with the state’s privacy laws and whether that will be a bigger hit to the company than a $25 billion payout.
“What changes a company is a court order that dictates how the product has to work, with someone independent checking,” said Michael Stokes, senior vice president of emerging technologies at Veilant, a data security software and technology company.
For Meta’s newer technologies, including AI and AI-assisted hardware, the ruling would have little impact.
“Settlements written for 2018 don’t cover those devices,” Stokes said.
Will Facebook users get a cut of $25 billion?
Meta could continue to pay out billions of dollars in additional cases involving privacy and the effects of its platform design on younger users. Cases are pending in Washington, DC, Florida and Texas, among other places, covering issues such as more Cambridge Analytica fallout and WhatsApp privacy.
For this new verdict, users shouldn’t expect another payout; the money will go to New Mexico’s public school fund.
The sum may sound huge, and in education, it could go a long way, but Stokes said it won’t destroy Meta’s business.
“Meta’s stock went up the day the judgment went down,” he said. “That tells you how the market sees a fine on its own.”
Still, a judgment against the company that could lead to even more litigation can’t be good for Meta. It’s not alone. Many other tech companies, from Google to OpenAI to Snap, are facing similar lawsuits over how they collect or use data.
“The question in every case is the same: Do a company’s privacy and safety promises match how the product works?” Stokes said. “Any company making those promises should expect to be tested on them.”
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