Meta Platforms has been ordered to pay $25 billion in a New Mexico case linked to the Cambridge Analytica scandal, after a judge ruled that the company misled users about its privacy practices.
The ruling, delivered on Wednesday by State District Court Judge Francis Mathew, represents a major legal setback for the technology giant and adds to a series of lawsuits and financial penalties confronting the company over its platforms and handling of user data.
Meta, which was known as Facebook when the scandal emerged, has rejected the decision and said it will appeal.
The case dates back to 2018, when Facebook disclosed that the personal information of as many as 87 million users had been improperly obtained by political analytics firm Cambridge Analytica. The firm used the information to develop profiles of American voters.
New Mexico filed its lawsuit in 2021, accusing Facebook of mishandling residents’ personal information and deceiving users about its data protection policies.
A jury found in September that Meta had violated the state’s Unfair Practices Act more than 43 million times.
In determining the penalty, Judge Mathew described the company’s conduct as a coordinated effort to mislead the public, arguing that its representations about users’ control over their personal information reflected a broader pattern rather than isolated incidents.
He said the alleged misrepresentations were central to Facebook’s business practices.
Meta, however, disputed the state’s approach to the case. Its chief legal officer, C.J. Mahoney, accused New Mexico’s attorney general of blurring the distinction between privacy regulation and freedom of expression.
The company argued that the ruling could make it difficult to operate in the state and maintained that it expects to prevail on appeal.
The $25 billion penalty comes amid a wider series of legal challenges facing Meta over privacy, social media use and alleged harm to young people.
In August, the company agreed to an $18 billion multistate settlement to resolve claims that its platforms had contributed to addiction and harmed young users. The agreement also addressed participating states’ outstanding claims connected to the Cambridge Analytica scandal, although New Mexico was not part of that settlement.
Meta also faced a separate New Mexico case earlier this year, in which it was ordered to pay nearly $1 billion over claims involving social media addiction and harm to young people.
In March, Meta and YouTube lost a separate case in Los Angeles brought by a young woman who alleged that social media platforms had contributed to addiction and related harm. Both companies plan to appeal.
The accumulating cases could increase the financial and regulatory pressure on Meta, although the ultimate cost will depend partly on the outcomes of appeals and other proceedings.
During its latest earnings report, the company disclosed that the $18 billion multistate settlement had significantly reduced its quarterly operating income.
Meta reported operating income of nearly $13 billion for the September quarter, compared with almost $23 billion it said it would have earned without the settlement.
Susan Li, Chief Financial Officer, told analysts that the company was monitoring active legal and regulatory matters that could have significant implications for its business and financial results. These include further youth-related trials expected later this year and next year.
Despite the legal setbacks, Meta continues to record strong revenue growth, supported in part by its expanding artificial intelligence business.
The company reported quarterly sales of more than $64 billion, representing year-on-year growth of 26 per cent. Its average advertising price also increased by 14 per cent, reflecting the contribution of improved engagement, recommendations and advertising monetisation.
Meta has been investing heavily in AI products and infrastructure. It launched its Muse AI personal assistant app in September and said the application had attracted more than 10 million users. The company also introduced its latest foundation model, Muse Wonder, last month.
The company attributed improvements in its advertising business partly to AI systems that help deliver more relevant recommendations and make advertising more effective.
