Meta calls New Mexico $25 billion data ruling a tax on speech and vows to appeal

A New Mexico judge ordered Meta to pay $25 billion this week for violating state consumer protection laws.

The ruling marks the largest financial penalty the social media giant has faced to date. The state filed the case in 2021, alleging that Meta misled users about data handling in a dispute rooted in the Cambridge Analytica scandal. The attorney general later added claims regarding content moderation. A jury sided with the state in September, leading to the multibillion-dollar judgment.

Meta intends to challenge the outcome. C.J. Mahoney, the company's chief legal officer, stated that the ruling and enforcement approach make it "all but impossible to do business in the state of New Mexico." He described the lawsuit as an effort to "impose a tax on speech" and expressed confidence that Meta will "prevail on appeal."

This fine is part of a series of legal setbacks for Meta in 2026. Earlier this year, a New Mexico jury ordered the company to pay $375 million for a child safety violation. A second phase of that trial resulted in a $567 million order. A Los Angeles County court also found Meta liable for harming a young woman's mental health through addictive design, awarding her $6 million. In August, Meta agreed to pay between $17 billion and $18 billion over 10 years to settle a federal case brought by most U.S. states.

Despite these costs, the amounts remain small relative to Meta's valuation of approximately $1.7 trillion. Reuters reported that New Mexico attorneys initially sought $35 billion to $45 billion. The maximum possible penalty was $219 billion, calculated at $5,000 for each of 43 million violations. Judge Francis Mathew reduced that figure to $25 billion. Meta's shares fell on Thursday, a move attributed to a mix of factors including earnings reports and heavy spending on AI.

Legal experts suggest that financial pressure alone may not be sufficient to drive change. Corban Rhodes, a partner at the firm representing New Mexico, noted that trial evidence becomes public material for future litigation. The New Mexico trial placed more than 100 exhibits on the public record, including documents kept secret for over a decade. One such exhibit is a 2018 email from then-COO Sheryl Sandberg, who warned of "many, many, many more moments like this" following the Cambridge Analytica scandal.

Pressure may also come from insurers and shareholders. A Delaware judge ruled in March that insurers have no duty to defend Meta against thousands of lawsuits. Some experts argue insurers could influence governance by making responsible design a condition of coverage. Brian Quinn, a Boston College law professor, said shareholders might demand that the company stop indemnifying individual directors if the same people repeatedly appear in similar legal facts. That would leave executives less protected.

Meta's legal troubles are expected to continue. Rhodes said regulators have focused on earlier social media issues, but the next wave of litigation will likely center on AI.