Earlier this week a New Mexico judge ordered Meta to pay a $25 billion penalty for breaching consumer‑protection laws that date back to the Cambridge Analytica controversy. The sum is the largest fine ever levied against the company, but it left us at WIRED wondering whether Meta would actually feel the impact.
The lawsuit, filed in 2021, accused Meta of violating the state’s Unfair Practices Act by deceiving users about how their data were handled. The state’s attorney general later added claims concerning Meta’s content‑moderation practices. In September a jury sided with New Mexico, leading to the multibillion‑dollar award.
“This ruling, and the Attorney General’s approach to enforcement, makes it all but impossible to do business in the state of New Mexico,” Meta’s chief legal officer C.J. Mahoney said in a statement. “At its core, this lawsuit seeks to impose a tax on speech to enforce new rules for what people can say online. We are confident we will prevail on appeal.”
Meta’s legal woes have multiplied this year. Earlier in New Mexico a jury ordered the company to pay $375 million for violations of the Unfair Practices Act tied to child‑safety concerns, and a second phase added $567 million. In Los Angeles County a superior court found Meta—and Google’s YouTube—liable for harming a user’s mental health through addictive design features; a young woman was awarded $6 million, most of which Meta must pay. In August, Meta settled a landmark federal case brought by the majority of U.S. states over similar addictive features, agreeing to pay between $17 billion and $18 billion over ten years.
All told, the billions add up, yet they still represent a routine cost of doing business for Meta. Reuters reported that the New Mexico attorneys originally asked Judge Francis Mathew to award the state $35 billion to $45 billion. Even that larger range would have been substantial for the state, but it would not have crippled Meta. If the judge had imposed the maximum request of $219 billion—$5,000 per each of 43 million violations—Meta’s market value of roughly $1.7 trillion would have absorbed the hit with only a mild sting. The company’s stock fell on Thursday, but the decline reflected a mix of factors, including Wednesday’s earnings report, heavy spending on artificial‑intelligence projects, and a broader pullback in AI‑related stocks.
Legal experts say that a single fine, no matter how large, is unlikely to force meaningful change at Meta. The firm faces a growing perception problem: juries are ruling against it, protesters are vocal, and even some employees have spoken out about internal policies. Every time Meta does not settle, the evidence presented in court becomes public and can be used in future actions, notes Corban Rhodes, a partner at DiCello Levitt, the firm representing New Mexico. “This trial included more than 100 exhibits that we were able to put into public record, things that had been kept secret for more than a decade since Cambridge Analytica,” Rhodes told WIRED.
One such exhibit is a 2018 email from then‑COO Sheryl Sandberg to a handful of colleagues, sent days after the Cambridge Analytica scandal broke. Sandberg wrote, “The single biggest issue we face—and I really need everyone to know this—is that there were a MILLION developers with access to the data. We are going to have many, many, many more moments like this in the next month and year.”
There are early signs that private insurers may begin to balk at covering the legal costs of tech giants. Some experts suggest insurers could become de facto governors of AI, imposing responsibility for design, development, and deployment as a condition for coverage. Meta experienced this in March when a Delaware judge ruled that insurers have no duty to defend the company against the thousands of lawsuits it faces.
No single monetary penalty appears capable of making Meta insolvent, but problems could arise if shareholders or board members start holding individual directors or officers accountable for repeated missteps, says Brian Quinn, a professor at Boston College Law School who studies corporate law. “The way indemnification law is written right now, the fact that a person in a company was found to have violated a law doesn’t necessarily make them liable. It can be believed that they were acting in good faith, or in the best interest of their company,” Quinn explained. “But problems start to arise if shareholders say, wait a minute, there’s not only evidence that this director or operator is violating the law, but it has appeared in the same set of facts seven times now.”
After a large accumulation of such outcomes, Quinn says, angry shareholders might demand that the corporation stop indemnifying those directors. That could force a change, because Meta’s executives would lose the legal shield that currently protects them.