Meta Ordered to Pay $25 Billion to New Mexico Over Facebook Privacy Claims

A New Mexico judge on Wednesday, October 21, 2026, ordered Meta to pay $25 billion in civil penalties for misleading Facebook users about how their personal data was shared. It is the largest penalty the company has ever faced, and it grows the longer it goes unpaid, because the award accrues interest at 15% a year.

The ruling caps a case that began with the Cambridge Analytica scandal nearly a decade ago. It also lands in the same week Meta told investors it plans to spend at least $135 billion this year, mostly on artificial intelligence, so the money, the appeal and the precedent all matter beyond one state.

Key facts at a glance

• The penalty: $25 billion, ordered by state District Judge Francis Mathew in Santa Fe, according to the New Mexico Department of Justice.
• The violations: a jury found Facebook broke New Mexico's Unfair Practices Act 43,899,725 times.
• The maximum: at $5,000 per violation, the judge calculated a possible penalty of about $219 billion, then cut it to $25 billion.
• The interest: the award accrues 15% a year until it is paid, as reported by Bloomberg Law.
• The response: Meta says it will appeal and is "confident we will prevail on appeal."

How the case got here

New Mexico Attorney General Raúl Torrez sued Facebook in 2021. The suit followed revelations that Cambridge Analytica, a now-defunct political consulting firm that worked on Donald Trump's 2016 presidential campaign, had harvested data from as many as 87 million Facebook users through a third-party app, according to Reuters reporting carried by NBC News.

The state went further than the scandal itself. It accused the company of misleading people about who could access their data, how it handled hate speech and misinformation, and how consistently it enforced its own rules. Bloomberg Law reported that the state pointed to evidence that certain high-profile accounts were not held to the same standards as ordinary users.

Unlike most states, New Mexico did not join a multistate coalition. The attorney general's office says it chose to pursue the case on its own so the allegations would be "tested in court." That decision is now the reason a single state of roughly two million people holds the largest penalty Meta has ever been ordered to pay.

What the jury and the judge decided

A verdict built on public statements

The two-week trial took place in the First Judicial District Court in Santa Fe. Jurors watched video deposition testimony from Mark Zuckerberg and former chief operating officer Sheryl Sandberg, Bloomberg Law reported.

On September 25, the jury found that 26 of 29 statements made by the company and its leadership were misleading, according to Reuters. Jurors counted each New Mexico resident or Facebook user who was the audience for a misleading statement as a separate violation. That method produced the total of 43,899,725 violations.

From $219 billion to $25 billion

New Mexico law allows a penalty of up to $5,000 per violation. Multiplied across the violation count, the judge put the maximum at more than $219 billion. He reduced it to $25 billion, still well above New Mexico's projected general-fund revenue of $14.8 billion for fiscal 2028, according to Bloomberg Law.

Judge Mathew did not soften his language. "Facebook's wrongdoing — over the course of years and systematically broadcast to the public — goes to the heart of Facebook's core business practices," he wrote. The BBC reported that he called the conduct "willful," said it spanned "more than 11 years" from 2010 to 2021, and found that communications among senior executives, including Zuckerberg, were "designed to mislead the public."

The table below shows how far apart the two sides were.

Sources: NBC News / Reuters, Bloomberg Law.

Meta's defence and the case for an appeal

Meta's chief legal officer, C.J. Mahoney, attacked both the ruling and the state's approach. "This ruling, and the Attorney General's approach to this enforcement, makes it all but impossible to do business in the state of New Mexico," he said in a statement reported by Bloomberg Law and the BBC. "At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online."

In court filings, the company argued that it does not sell user data and that New Mexico never proved any consumer was actually misled. It also warned that a penalty in the billions risked violating its constitutional protections against excessive fines and its right to due process. Meta asked the judge to cap the total at $3.45 billion, saying a larger figure could scare businesses away from the state.

Legal experts quoted by Reuters expect a long fight. Daryl Lim, an associate dean at Penn State Dickinson Law, noted that while the U.S. Constitution generally protects against excessive fines, the way New Mexico's law is written means the size of the penalty does not automatically make it vulnerable on appeal. Until the appeal is resolved, the 15% annual interest keeps accumulating on paper.

Why investors barely blinked

A big number next to bigger ones

Wall Street's reaction was muted. Meta shares rose less than 1% in regular trading on Wednesday to close at $697.52, then added about 2% after hours once the company raised its spending outlook and gave an upbeat fourth-quarter sales forecast, Bloomberg Law reported.

Gil Luria, head of technology research at D.A. Davidson, called the ruling costly but unlikely to affect the company's value. "Meta is worth nearly $2 trillion and will likely continue to appeal these cases and drag them out," he told Reuters.

The scale of Meta's business explains the calm. The BBC reported that revenue for July to September rose 26% from a year earlier to $64.5 billion, and profit tripled to $9.8 billion. The company expects to spend at least $135 billion this year, and possibly up to $145 billion, mostly on AI.

The counterpoint: pressure is stacking up

That calm does not mean the penalty is trivial. The BBC found that heavy AI spending left Meta with negative cash flow of more than $2 billion in the quarter, which appears to be a first since the company listed 14 years ago. A $25 billion bill, plus interest, would land on a balance sheet that is already being stretched.

New Mexico has also become one of Meta's most persistent opponents. Earlier this year, a separate Santa Fe jury found Meta misled users about young people's safety on its platforms and imposed $375 million in civil penalties. A judge later ordered a further $567 million payment into a state fund for teen mental health, according to Reuters and Bloomberg Law.

What it means for you

For most Facebook and Instagram users in the US, UK, Canada and Australia, nothing changes on your screen today. The ruling is a financial penalty under New Mexico law, and none of the reporting describes changes to the apps themselves.

The bigger shift is in how privacy promises are enforced. This case turned public statements by a company and its executives into countable violations, one per person who heard them. If that approach survives appeal, other US states could copy it, and companies everywhere will have more reason to make privacy claims they can back up.

For investors, the immediate hit looks manageable, but the legal bill is growing. Meta paid $5 billion to the Federal Trade Commission in 2019 over the same scandal, settled a consumer class action for $725 million in 2022, and paid $459 million this summer to resolve related state cases, according to Bloomberg Law. The New Mexico penalty is larger than all three combined.

For New Mexicans, the stakes are local. Torrez has said state law directs all of the money to the school system, Reuters reported. When that money arrives depends on how the appeal plays out.

What happens next

The next step is Meta's appeal, which the company has already promised. Several questions will decide how this ends:

1. Will the appeal court accept the violation count? Treating every person who heard a statement as a separate violation is what produced the huge numbers.
2. Will the excessive-fines argument work? Meta's constitutional challenge is its main line of defence against the size of the award.
3. How long will it take? Analysts expect the case to be dragged out, while interest accrues at 15% a year.
4. Will other states follow? New Mexico has now won two jury trials against Meta in six months while going it alone.

Torrez framed the ruling as a warning. "This judgment should be a signal, an unambiguous message to anyone in Silicon Valley and beyond that New Mexico will stand strong and go to court," he said, according to Bloomberg Law.

The bottom line

A $25 billion penalty is a record for Meta, but the final number will be set on appeal, not this week. What already matters is the method: a state counted misleading public statements person by person and won.

Practical takeaways:

• Review your Facebook and Instagram privacy settings, especially which third-party apps still have access to your account, and remove any you no longer use.
• Treat company privacy promises as claims to verify. Check what data an app requests before you connect it to a social account.
• If you invest in Meta, watch the appeal timeline and the cash-flow trend together, since rising AI spending and legal costs are now hitting the same balance sheet.
• Follow your own state or national regulator. Consumer protection agencies and data watchdogs are where similar cases are likely to start.

FAQ

Does Meta have to pay the $25 billion now?

Meta has said it will appeal, and analysts expect a lengthy process. The award accrues 15% annual interest until it is paid.

Is this the same case as the teen safety verdict?

No. That was a separate New Mexico trial earlier this year that produced a $375 million penalty and a $567 million payment for teen mental health programs.

Why was the penalty so large?

The jury found 43,899,725 violations, and state law allows up to $5,000 for each one. The judge calculated a maximum above $219 billion and reduced it to $25 billion.