Meta Ordered to Pay $25 Billion in New Mexico in Cambridge Analytica Verdict

A jury in New Mexico ruled in September that Meta committed more than 43 million violations of the state's consumer protection laws. On Wednesday (21), Judge Francis Mathew ordered the company to pay $25 billion in civil penalties to the state — a record amount for a state-led action against a technology company in the United States.

The decision concludes one of the longest and most costly chapters of technology regulation in the U.S. The case dates back to 2014, when a personality quiz on Facebook — the app "This Is Your Digital Life," developed by researcher Aleksandr Kogan — collected data from approximately 87 million user profiles and passed it to Cambridge Analytica, a political consulting firm that used the information to create targeted advertisements during the 2016 U.S. presidential election.

A decision that broke precedent

What made this case singular was New Mexico's decision to decline the $18 billion settlement that 48 other states signed with Meta in August this year. While most state attorneys general opted for the global deal — which included both claims about harm to children and the release of liabilities related to the Cambridge Analytica scandal — New Mexico, led by Attorney General Raúl Torrez, chose to go to trial.

"This judgment should be a signal, an unambiguous message to Silicon Valley," Torrez said at a press conference. "We may have paid for the construction of schools for the next 100 years," he added, referring to the fact that under the New Mexico Constitution, fines for consumer protection violations are earmarked for state education funding.

The Santa Fe jury deliberated for just over two weeks, reviewing evidence about how Facebook manipulated information about privacy, data collection policies, and content moderation. Each individual violation carries a penalty of up to $5,000, which could theoretically result in a maximum of $219 billion in fines — the amount Judge Mathew reduced to the final $25 billion.

Meta's defense

Meta's lawyers argued in court that a conviction of this magnitude would violate constitutional due process. C.J. Mahoney, the company's chief legal officer, said the ruling "makes it all but impossible to do business in the state of New Mexico" and that the lawsuit seeks, essentially, to "impose a tax on free speech to enforce new rules about what people can say online."

The company had already declared, following the jury's verdict in September, that it plans to appeal. The case now moves to the state appellate court, where issues such as the stacking of penalties per individual violation — a mechanism rarely applied at such a large scale against a technology company — will be central to the legal dispute.

Matt Nicholson, a Meta attorney, described in court that a conviction of up to $40 billion would be "shocking to the conscience," while Randi McGinn, a New Mexico attorney, urged citizens to "stand up to tech titans who think they are bulletproof and can do whatever they want."

The market didn't seem shaken

Interestingly, the penalty announcement was accompanied by a rise in Meta's stock: shares rose 2% on the day of the decision, suggesting that investors may have anticipated the financial impact or seen the conviction as a predictable business cost, in contrast to the $219 billion ceiling that was effectively discarded by the judge.

The company was scheduled to report its third-quarter results on the same afternoon — the jury decision fell on the same day, creating a simultaneous window for analysis on the company's Q3 financial impact.

What comes next

The New Mexico case opens the path to a new model of state regulation against major technology companies. If the conviction is upheld on appeal, it sets a precedent for other states that declined global settlements to seek significantly larger penalties. To date, Florida was the only other state to refuse the $18 billion deal — and it may do the same, depending on how New Mexico fares on appeal.

Cambridge Analytica, for its part, has already filed for bankruptcy and its operations have been shut down. But the legacy of the case continues to cost Meta billions of dollars — and the amount should grow as legal disputes stretch over years.

Sources: ABC News, CNBC, AI Weekly

✓ Independent sources cross-checked and verified before publishing