On a Wednesday in October, a judge in New Mexico ordered Meta, the company behind Facebook, Instagram and WhatsApp, to pay $25bn, the largest penalty it has ever faced. The ruling caps a long story that begins with the Cambridge Analytica scandal and the question of who may see the private lives people entrust to a platform, and it follows a jury's finding that the company spent years telling the public something other than the truth. Meta says it will appeal, insisting that what was labelled a consumer protection case is in truth a tax on speech, and the outcome will show how far a single sta
Meta Ordered to Pay $25bn in New Mexico Ruling Over Misleading Statements on User Data
The lies extend beyond Facebook's data practices as well.
Mark
Twenty-five billion dollars is a staggering number. How should we read it?
Mimi
Against the paper figure. The judge calculated $219bn from thousands of violations, then cut it to $25bn. That's roughly one quarter of Meta's profit, and it's the biggest penalty the company has faced.
Mark
What exactly did the jury find?
Mimi
That Meta misled the public for years about data sharing, with violations counted more than 40 million times. It also found intentional misleading about hate speech and how rules against it were enforced.
Luke
Worth separating those. The judge's language about willfulness, 2010 to 2021, and executives' communications being designed to mislead is the court's finding. Meta disputes the accusations, so that's contested, not settled beyond appeal.
Mark
Meta calls this a tax on speech. Is that a fair description?
Mimi
It's their argument, made by lawyer CJ Mahoney, and he also said the ruling makes doing business in New Mexico nearly impossible. The state's case rested on statements about data being shared without permission.
Luke
Right, and the reporting doesn't tell us how the appeal will go. Mahoney says it will succeed, but that's a prediction from the party that lost.
Mark
Does the money threaten Meta?
Mimi
Hard to see it that way from these figures. Revenue was $64.5bn for the quarter and profit $9.8bn. But spending on AI, $135bn to $145bn this year, pushed cash flow negative by over $2bn.
Luke
Careful, though. Nothing here says the fine caused that cash flow dip, and Meta hasn't said how it would pay or whether the penalty survives appeal.
Mark
So what's the thing to watch?
Mimi
The appeal, and whether other states follow New Mexico's lead.
The Pulse
- A jury found Meta misled the public about data sharing, and the judge called the violations willful across more than a decade.
- Over 40 million violations were counted, and a $219bn paper penalty was cut down to $25bn, still the largest fine the company has faced.
- Meta's lawyers warn the ruling makes doing business in New Mexico nearly impossible and vow an appeal they predict will succeed.
- Attention now turns to the appeal and to whether other states follow New Mexico with similar suits against the company.
On a Wednesday in October, a judge in New Mexico ordered Meta, the company behind Facebook, Instagram and WhatsApp, to pay $25bn, the largest penalty it has ever faced. The ruling caps a long story that begins with the Cambridge Analytica scandal and the question of who may see the private lives people entrust to a platform, and it follows a jury's finding that the company spent years telling the public something other than the truth. Meta says it will appeal, insisting that what was labelled a consumer protection case is in truth a tax on speech, and the outcome will show how far a single state can reach into a company that touches nearly everyone.
On Wednesday, a New Mexico judge ordered Meta to pay $25bn, the largest penalty ever levied against the company behind Facebook, Instagram and WhatsApp. The sum followed a two-week trial in which a jury concluded that Meta had spent years misleading the public about how it handled user data.
The case traces back to Cambridge Analytica, the political consulting firm that drew on the data of millions of Facebook users, including work linked to the 2016 US presidential election. New Mexico argued that executives repeatedly assured people their data was never shared with or accessed by third parties without permission, when it had been. The state said roughly two million residents were affected, and the jury found more than 40 million violations of state law.
Judge Francis Mathew called the violations willful and said senior executives, Mark Zuckerberg among them, had written communications designed to mislead, reaching the heart of Facebook's core business. He reduced a theoretical $219bn penalty to $25bn, roughly what Meta earns in profit each quarter.
New Mexico's Attorney General Raúl Torrez said no corporation is too powerful to be held accountable. Meta's head lawyer, CJ Mahoney, called the ruling crippling for doing business in the state and described the suit as an attempt to tax speech. The company will appeal.
The fine arrives in a difficult year for Meta, which has also settled with California and faced earlier penalties, while pouring over $135bn into artificial intelligence. Its first negative cash flow in years of listed history sits alongside rising revenue. What comes next is the appeal, and whether other states follow New Mexico's lead.
On Wednesday, a judge in New Mexico ordered Meta to pay $25bn (£18.6bn), the largest penalty ever imposed on the company behind Facebook, Instagram and WhatsApp. The order followed a two-week trial earlier this year, in which a jury found that the company had spent years misleading the public about how it handled Facebook user data.
The case grew out of the Cambridge Analytica scandal, in which that political consulting firm used data from millions of Facebook users. Its work included projects tied to the 2016 US presidential election, which first elected Donald Trump. Lawyers for New Mexico built their suit around statements Meta executives made over many years: that user data was never shared with or accessed by third parties without a user's permission. In reality, the state argued, it had been.
The state said the whole of its population, roughly two million people, was affected by those misstatements. The jury found that Meta had violated state law more than 40 million times. It also found that the company had intentionally misled the public about how it benefited from content including hate speech, and about how its rules against such content were enforced. Meta disputes those accusations.
Judge Francis Mathew did not soften his language. He wrote that the violations and misrepresentations were "willful" and spanned more than 11 years, from 2010 to 2021. Communications between senior executives, Mark Zuckerberg among them, were "designed to mislead the public," he wrote. The lies, he said, went beyond data practices to "the heart of Facebook's core business practices." The penalty, calculated from thousands of violations, came to $219bn on paper; the judge reduced it to $25bn, an amount roughly equal to what Meta earns in profit each quarter. State lawyers had sought up to $40bn, while Meta had argued that anything above $3.4bn would be unconstitutional.
New Mexico Attorney General Raúl Torrez said powerful technology companies had for too long behaved as though their size put them beyond the law, and that the result showed no corporation is too powerful to be held accountable. Meta's head lawyer, CJ Mahoney, said the ruling made it "all but impossible to do business in the state of New Mexico." He said the company will appeal and predicted it would succeed. He also characterised the suit as an attempt to "impose a tax on speech to enforce new rules for what people can say online."
The $25bn figure sits atop a busy year in court for Meta. It has been fined or agreed to settle several suits, including an $18bn deal with California over child safety. In 2019 the US Federal Trade Commission fined it $5bn over data privacy. New Mexico is itself a repeat adversary: earlier this year the state fined Meta almost $1bn for misleading the public about the safety of its platforms for children. The judge in that case compared Meta to an industrial polluter, its pollution being "the psychological harm and sexual exploitation of children."
The fine lands as Meta spends heavily on artificial intelligence. On a call with financial analysts, Zuckerberg said the company's consumer AI tool, Muse, already has 10 million users, adding that growing it to serve billions is "both our mission and our strategy." Meta expects to spend at least $135bn this year, mostly on AI projects, and possibly up to $145bn.
That spending produced negative cash flow of more than $2bn, which a BBC review of past filings suggests is a first since Meta listed 14 years ago. Revenue for July to September rose 26% from a year earlier to $64.5bn, and profits tripled to $9.8bn. Chief financial officer Susan Li announced a stock split in which shareholders will receive one share of a new non-voting class for each share they hold. She said it was not tied to a specific investment but pointed to AI costs and said the company could use "more funding flexibility" next year.
What to watch now is the appeal Meta has promised, and whether the size of the New Mexico penalty encourages other states to bring similar suits.
Notable Quotes
No corporation is too powerful to be held accountable.— Raúl Torrez, New Mexico Attorney General
The ruling makes it all but impossible to do business in the state of New Mexico.— CJ Mahoney, Meta's head lawyer
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