• A New Mexico judge has reportedly ordered Meta to pay $25 billion in civil penalties after a jury found the company misled consumers about its privacy practices.
  • The penalty, if confirmed, falls below the state's $35–40 billion request but far exceeds Meta's proposed cap of $1.53 billion.
  • The ruling adds to Meta's mounting legal costs as it ramps up capital spending on artificial intelligence infrastructure.

A Landmark Verdict

A New Mexico state judge has ordered Meta Platforms (META) to pay $25 billion in civil penalties, according to a ruling issued Thursday, following a jury verdict that the social-media giant misled consumers about its data-privacy practices. The decision, if it stands, would rank among the largest consumer-protection penalties ever levied against a technology company.

The penalty stems from a September 25 jury finding that 26 of 29 statements made by Meta and its leadership about data practices, hate speech and misinformation policies were misleading. Jurors determined that Meta committed more than 43 million consumer-protection violations, counting the audiences exposed to the statements rather than distinct individuals. New Mexico subsequently requested $35–40 billion, while Meta argued for a penalty of no more than $1.53 billion, down from an earlier $3.45 billion proposal.

Judge Francis Mathew, who presided over the case, had been expected to determine the penalty in October. The $25 billion figure falls below the state's request but represents a significant financial hit for Meta, equivalent to roughly 28% of its $90.26 billion in cash and marketable securities as of June 30 and exceeding its $15.85 billion in net income for the second quarter.

Financial and Operational Implications

The penalty arrives as Meta is projecting $130–145 billion in capital expenditures for 2026, a massive bet on artificial-intelligence infrastructure. In the second quarter, the company generated $31.86 billion in operating cash flow, but capital spending left free cash flow at just $784 million. An additional $25 billion payment would compete directly with those investments and potential shareholder returns.

Meta's second-quarter revenue rose 28% year over year to $60.80 billion, but expenses surged 55%, including $2.40 billion in legal charges and $1.18 billion in severance costs related to a May workforce reduction of approximately 8,000 employees. The company's operating margin compressed to 31% from 43% a year earlier. The previously reported legal charges should not be assumed to cover the newly reported penalty.

A Meta spokesperson did not immediately respond to a request for comment on the ruling. The company has previously said it plans to appeal the verdict, arguing that the penalty is constitutionally excessive and that its statements were taken out of context. New Mexico Attorney General Raúl Torrez's office, which brought the case, did not return a request for comment.

Legal and Regulatory Context

The case, filed in 2021, followed the Cambridge Analytica scandal in which a British political consultancy obtained data from as many as 87 million Facebook users through a third-party app without consent. New Mexico's lawsuit focused on whether Meta's subsequent public statements about data access and platform policies misled consumers.

The verdict underscores the growing willingness of state attorneys general to pursue large-scale penalties under consumer-protection laws, even in the absence of a federal privacy regime. Meta has argued that the penalty is disproportionate to the conduct proven at trial, and even the state acknowledged that applying the statutory maximum of $5,000 per violation across all 43 million violations would be constitutionally excessive.

The ruling also comes amid a broader legal onslaught for Meta. In March 2026, a New Mexico jury returned a $375 million verdict against the company in a separate case over youth safety, and in August the company agreed to a $567 million youth mental-health fund and platform changes. Meta also reached a multistate agreement with a maximum value of about $16.7 billion to resolve youth-addiction claims across 47 states, Washington, D.C., and U.S. territories, though New Mexico did not join that settlement.

What's Next

The judge's written order is expected to detail payment terms and whether collection can be stayed during appeal. Meta is widely expected to challenge the penalty, and the case could ultimately reach the U.S. Supreme Court, given the novel questions it raises about the scope of state consumer-protection enforcement against online platforms.

For investors, the key question is how much of the $25 billion will ultimately be paid and over what timeframe. Meta's shares were little changed in after-hours trading following the ruling, suggesting that the market had already priced in a significant penalty. The company's ability to absorb the hit without derailing its AI spending plans will be closely watched.

Correction: An earlier version of this article misstated the date of the jury verdict. It was September 25, not September 15.