Meta Hit With $25 Billion Penalty for Misleading Facebook Users About Privacy

Meta Platforms has been ordered to pay New Mexico $25 billion after a jury found that Facebook misled consumers about their personal information and privacy protections, exposing the social media giant to one of the largest corporate penalties in U.S. history.

The October 21, 2026, judgment follows a jury verdict finding nearly 44 million violations of New Mexico's consumer protection lawconsumer protection lawConsumer protection law is the body of federal and state laws designed to protect people from unfair, deceptive, fraudulent, or abusive practices in the marketplace. These laws regulate areas such as advertising, sales, lending, debt collection, credit reporting, warranties, financial services, and consumer products.Read more →. State District Judge Francis J. Mathew calculated an initial penalty of nearly $219.5 billion before reducing it to $25 billion, with 15% annual interest accruing until the judgment is paid.

The ruling follows years of litigation stemming from the Cambridge Analytica scandal and includes findings that Facebook executives knew about problems with the company's data practices while continuing to assure users their information was protected. Mathew also cited misleading statements about misinformation, hate speech, and the treatment of prominent accounts on the platform.

In his findings, the judge concluded that Facebook's public assurances were part of a coordinated effort to mislead consumers over more than 11 years. Internal company records showed discrepancies between the platform's privacy promises and the access it allowed third-party applications to users' personal information.

The evidence also implicated Meta CEO Mark Zuckerberg, whose internal communications reflected an awareness that users did not fully understand Facebook's privacy settings. In one exchange cited in the proceedings, Zuckerberg discussed allowing people to adjust those settings while avoiding efforts to encourage them to do so.

Facebook's treatment of outside developers became central to the lawsuit after Cambridge Analytica obtained personal information from as many as 87 million users through a third-party application. The political consulting firm, which worked on Donald Trump's 2016 presidential campaign, used Facebook data to help develop targeted political advertising.

New Mexico filed its lawsuit in 2021, accusing the company of misleading consumers about who could access their information and how it responded to the scandal. State attorneys also challenged Facebook's public statements about enforcing community standards, including its handling of harmful content and preferential treatment for certain accounts.

Following a 13-day trial in Santa Fe, jurors sided with the state on 31 of 34 counts on September 25, finding 43,899,725 violations of New Mexico's Unfair Practices Act. The verdict covered statements about data collection, privacy controls, investigations into third-party access, and the company's efforts to address hate speech and misinformation.

New Mexico law permits civil penalties of up to $5,000 for each willful violation. Mathew found that the duration of Facebook's conduct, its repeated misrepresentations, the involvement of senior executives, and the number of consumers reached justified the maximum penalty. He ultimately reduced the calculated $219.5 billion award to $25 billion without detailing how he arrived at the lower figure.

The financial consequences could grow during the appeals process. Under the judgment, the unpaid penalty accrues interest at 15% annually, equivalent to $3.75 billion over a full year on the original $25 billion amount, assuming the principal remains unchanged.

Meta's attorneys sought to cap the penalty at approximately $3.45 billion, arguing that a larger award would be constitutionally excessive. They also challenged the state's method of counting violations, arguing that New Mexico had failed to establish that individual consumers saw the disputed statements or suffered harm from them.

The company plans to appeal the judgment. Meta chief legal officer C.J. Mahoney argued that the ruling would make it extremely difficult for the company to operate in New Mexico and accused state officials of using consumer protection laws to impose restrictions on online speech. Meta maintains that it has improved its privacy protections and content moderation practices.

New Mexico Attorney General Raúl Torrez welcomed the decision, saying it should serve as a warning to major technology companies about the consequences of misleading consumers. The state pursued its case independently after other states reached a settlement with Meta, allowing New Mexico to seek penalties based on its own consumer protection law.

Under New Mexico law, the civil penalties are designated for the state's education system. However, Meta's planned appeal could delay the collection and distribution of the money while courts review the verdict and the size of the award.

The judgment adds to Meta's legal troubles in New Mexico, where separate child safety proceedings involving Facebook and Instagram resulted in $942 million in financial penalties and court-ordered relief earlier this year. Those proceedings concerned risks to minors, while the latest case arose from Facebook's broader statements about privacy and platform practices.

Mathew has yet to decide whether Meta must change its business practices under additional court-ordered restrictions. The parties will submit further arguments on those measures as the company prepares to appeal the $25 billion judgment.