Can Meta Feel the Pain of a $25 Billion New Mexico Fine?
Earlier this week, a New Mexico judge ordered Meta to pay a record $25 billion fine for violating consumer protection laws connected to the Cambridge Analytica scandal. The penalty is the largest Meta has ever faced—but is it large enough to significantly hurt the social media giant?
Why New Mexico Fined Meta
Filed in 2021, the lawsuit alleged that Meta misled users about how it handled their personal data, violating New Mexico’s unfair practices laws. The state’s attorney general later challenged Meta’s content moderation policies as well. In September, a jury ruled in New Mexico’s favor, leading to billions of dollars in penalties.
“This ruling and the Attorney General’s enforcement policies have made it nearly impossible for us to do business in New Mexico,” CJ Mahoney, Meta’s chief legal officer, said in a statement. “The core of this case seeks to impose a speech tax to enforce new rules for people to speak online. We are confident we will prevail on appeal.”
Meta Faces a Growing List of Legal Penalties
Meta’s legal troubles have expanded rapidly this year. In an earlier New Mexico case focused on child safety, a jury awarded the state $375 million for violations of its unfair practices law. During the second phase of that lawsuit, Meta was ordered to pay an additional $567 million.
Meanwhile, the Los Angeles County Superior Court found Meta Inc. and Google Inc.’s YouTube liable for harming users’ mental health through addictive design features. A young female plaintiff was awarded $6 million in damages.
Meta also settled a landmark federal lawsuit brought by most U.S. states. That case centered on the alleged harm caused by addictive app features, particularly to children. Under the settlement, Meta will pay the states between $17 billion and $18 billion over 10 years.
Would a $25 Billion Fine Hurt Meta?
The penalties add up to billions of dollars, but they may still represent the cost of doing business for Meta. In the latest New Mexico case, state lawyers initially asked Judge Francis Mathews to award between $35 billion and $45 billion, Reuters reported. The final penalty was lower—but would the additional $20 billion have seriously weakened Meta? Probably not.
Even a maximum penalty of $219 billion—calculated at $5,000 for each of 43 million violations—would have represented a major financial blow. Yet Meta is worth approximately $1.7 trillion as of this writing. A $25 billion penalty would be painful, but likely manageable for the company.
Meta’s stock price fell sharply on Thursday amid several factors, including its earnings report on Wednesday, heavy investment in artificial intelligence and a broader decline among AI-related stocks. The market reaction suggests that the company’s financial performance and spending plans may matter more to investors than any single legal penalty.
Source: www.wired.com