Photo Credit: Getty Images
Meta is facing one of the largest financial penalties ever imposed on a technology company after a New Mexico judge ordered the social media giant to pay $25 billion over allegations that it misled users about its privacy practices.
The ruling, delivered on Wednesday, stems from a lawsuit filed by New Mexico in 2021 following revelations that personal information belonging to millions of Facebook users had been improperly obtained by political analytics firm Cambridge Analytica.
The scandal became public in 2018, when Facebook disclosed that information from as many as 87 million users had been accessed without proper authorisation. Cambridge Analytica reportedly used the information to build profiles of American voters, raising serious concerns about the misuse of personal data and the influence of technology platforms on political processes.
New Mexico authorities accused Facebook, now known as Meta, of mishandling residents' personal information and deceiving users about the company's privacy policies. The case has since become part of a wider legal reckoning over the responsibilities technology companies have towards their users.
Meta strongly criticised the latest ruling and indicated that it would appeal. Chief Legal Officer C.J. Mahoney argued that the decision could make it difficult for the company to operate in New Mexico, describing the lawsuit as an attempt to impose restrictions on online speech.
The company maintains that it expects to prevail on appeal, setting the stage for a potentially lengthy legal battle.
The decision comes amid a growing list of legal challenges facing Meta. Earlier this year, the company was ordered to pay nearly $1 billion in a separate New Mexico case involving allegations that its platforms contributed to addiction and harm among young people. Meta and YouTube also lost a related case in Los Angeles in March and have indicated plans to appeal.
In August, Meta agreed to an $18 billion multistate settlement resolving claims concerning youth safety and platform addiction, alongside participating states' outstanding claims related to Cambridge Analytica. New Mexico was not part of that settlement.
Despite the mounting legal pressure, Meta continues to report strong commercial growth, largely supported by its investments in artificial intelligence. The company recorded quarterly revenue exceeding $64 billion, representing a 26 per cent increase compared with the same period a year earlier.
Its average advertising price also rose by 14 per cent, reflecting improvements in engagement, recommendations and advertising efficiency.
However, Meta's investment in artificial intelligence infrastructure remains substantial. Capital expenditure reached nearly $35 billion during the quarter, while its projected spending for the full year was narrowed to between $135 billion and $145 billion.
The company also reported lower quarterly profits than Wall Street had expected, partly because of the previously agreed settlement.
The ruling highlights the growing financial and reputational risks facing major technology companies as governments demand stronger privacy protections and greater accountability. For Meta, the immediate challenge will be defending itself in court while convincing users, regulators and investors that its business can continue to grow amid increasingly intense scrutiny.
