The ruling, delivered on Wednesday in New Mexico, followed a lawsuit brought by the state's Attorney General, Raúl Torrez, who accused Meta of misleading Facebook users about the handling of their personal information and the company's approach to harmful content on its platforms.
New Mexico Attorney General Raúl Torrez described the judgment as one of the largest, if not the largest, single-state verdict against a company in American history.
In his order following the jury's verdict, Judge Francis Mathew said the company's conduct was central to its business operations and had continued over an extended period.
“Facebook's wrongdoing — over the course of years and systematically broadcast to the public — goes to the heart of Facebook's core business practices,” Mathew wrote.
The judge determined that a penalty exceeding $219 billion could be justified under state law but reduced the amount to $25 billion.
Meta, however, rejected the ruling and indicated that it would challenge the judgment in court. The company's chief legal officer, C.J. Mahoney, said the technology firm remained confident of winning on appeal.
“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,” Mahoney said.
“At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online,” he added.
Meta had previously argued that imposing penalties running into billions of dollars could violate its constitutional protections against excessive fines and the denial of due process.
The judgment represents the latest major financial consequence for the company arising from the Cambridge Analytica scandal, which exposed concerns about how Facebook users' personal information could be accessed and used without their consent.
In 2019, Meta paid a $5 billion penalty to the United States Federal Trade Commission over the same scandal. Six other states subsequently settled related lawsuits for a combined $459.2 million as part of a broader multistate settlement announced in August, which also addressed claims that Meta's platforms had harmed teenagers' mental health.
Five-Year Legal Battle
New Mexico filed its lawsuit against Meta in 2021 after revelations that Cambridge Analytica, a now-defunct political consulting firm, had obtained personal information from as many as 87 million Facebook users through a third-party application.
The firm worked for Donald Trump's successful 2016 presidential campaign and used personal information obtained from millions of Facebook accounts for voter profiling and political targeting.
The data was reportedly collected without users' consent through a researcher who had been permitted by Facebook to deploy an application on the social media platform.
In its lawsuit, New Mexico accused Meta of misleading users about who could access their personal information and how the company managed hate speech, misinformation and other harmful material.
The state also alleged that Meta knew third parties had extensive access to users' data and tolerated harmful content when doing so served its commercial interests.
Torrez welcomed Wednesday's ruling, describing it as a significant development in efforts to hold major technology companies accountable for their conduct.
“It has been a long time coming holding Big Tech accountable,” he told a press conference in Albuquerque after the judgment.
“I think today's judgment is a clear break with that past and a very clear warning to those in this space and beyond that we intend to protect our people and protect our consumers,” he added.
Despite the scale of the penalty, some financial analysts suggested that the ruling might have a limited effect on Meta's overall market value, given the company's size and its intention to pursue further legal challenges.
Gil Luria, head of technology research at D.A. Davidson & Co., described the judgment as costly but said it was unlikely to significantly affect the company's valuation.
“Meta is worth nearly two trillion dollars, and will likely continue to appeal these cases and drag them out,” Luria said.
Appeal Battle Expected
The judgment followed a jury decision on September 25, which found that 26 of 29 statements made by Meta and its leadership concerning the issues in the case were misleading.
Jurors also determined that the company had committed more than 43 million violations of New Mexico's consumer protection laws, calculated according to the number of Facebook users or state residents who were exposed to each misleading statement.
Under state law, each violation attracts a potential penalty of up to $5,000, with the proceeds directed to New Mexico's school system, Torrez said after the verdict.
During a hearing on October 1, Randi McGinn, a lawyer representing the state, asked the court to impose a penalty of between $35 billion and $40 billion, arguing that the amount would be consistent with constitutional protections and the jury's findings.
“This court should speak to Meta in the only language it understands, which is money, and the value of its stock price,” McGinn said.
Meta, in its court filings, urged the judge to limit the penalties to $3.45 billion. The company argued that a significantly higher amount could discourage businesses from operating in New Mexico.
It also maintained that it did not sell users' personal data and that the state had failed to establish that any consumer had actually been misled.
Legal experts said the judgment could face a lengthy appeal, with the eventual outcome likely to depend on how the courts interpret state consumer protection laws alongside constitutional safeguards against excessive financial penalties.
Daryl Lim, an associate dean at Penn State Dickinson Law, noted that although the US Constitution generally provides protection against excessive fines, the size of the award alone would not automatically mean it would be overturned, given the structure of New Mexico's law.
Second Jury Verdict Against Meta
Wednesday's ruling marked the second time in six months that a jury in Santa Fe had ruled against Meta in a lawsuit brought by New Mexico.
In the first trial, which concluded in March, jurors found that the company had misled users about the safety of young people on Facebook, Instagram and WhatsApp. The jury ordered Meta to pay $375 million in civil penalties.
Following a second phase of that trial, a judge directed the company to pay an additional $567 million into a New Mexico fund for teen mental health and ordered it to introduce measures to protect teenage users of Facebook and Instagram in the state.
The latest judgment adds to the legal and regulatory challenges facing Meta over its handling of personal information, consumer protection and the safety of younger users.
With the company vowing to appeal the $25 billion penalty, the dispute is expected to continue through the courts, prolonging a legal battle that began with questions about how Facebook users' personal data was accessed and used during the 2016 US presidential election.