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A New Mexico judge recently ordered Meta to pay a staggering $25 billion to resolve claims that the company misled users about the 2018 Cambridge Analytica scandal and related incidents. This ruling far exceeds a previous $17 billion multi-state settlement involving most other US states, prompting experts and officials to question whether those settling states should have demanded higher payouts.
The Impact of New Mexico’s Massive Ruling
The outcome depends significantly on whether this $25 billion penalty survives Meta’s upcoming appeals. Meta chief legal officer C.J. Mahoney stated that the company is confident it will prevail on appeal, describing the New Mexico lawsuit as an attempt to impose a tax on speech. However, if the penalty stands, it could incentivize opponents of Big Tech to pursue aggressive courtroom litigation rather than settling for smaller amounts, as reported by The Verge.
Daphne Keller, director of platform regulation at the Stanford Program in Law, Science & Technology, noted to The Verge that settling attorneys general might experience regret over waived claims and search for remaining legal avenues to secure similar funds. Meanwhile, individuals, school districts, and tribes with pending claims will likely feel encouraged to pursue aggressive litigation.
Comparing Settlements to Courtroom Victories
The $25 billion court judgment addressed millions of violations of New Mexico’s unfair practices law after a jury concluded Meta misled users regarding data protection, misinformation, and hate speech. Conversely, most other states resolved similar claims through a kids online safety settlement totaling $459 million.
Despite the smaller payout, taking the settlement offered distinct advantages. It guaranteed certainty and faster payments spread over 10 years, alongside immediate product commitments from Meta, such as restrictions on teen usage. Furthermore, differing state laws and available evidence meant other attorneys general faced distinct legal landscapes.
Nevertheless, New Mexico’s success—alongside a separate $1 billion judgment against Meta in the state—could embolden ongoing privacy and child safety lawsuits. Keller told The Verge that settling states accepted pennies on the dollar by comparison, which may make officials less willing to settle future cases or compel them to demand substantially more.
Future Challenges and State-Level Tech Policy
Florida Attorney General James Uthmeier, whose state stayed out of the Meta settlement, celebrated the New Mexico ruling on social media by calling the multi-state agreement a slap on the wrist and asserting Florida’s commitment to accountability. The District of Columbia could serve as the next testing ground, having refused to settle its Cambridge Analytica claims.
While attorneys general who joined the settlement cannot pursue those specific claims anymore, they might still target other social media platforms like TikTok, YouTube, and Snap. Blake Reid, an associate professor at Colorado Law, told The Verge that these events reflect a broader shift toward state-level tech policy amid federal inaction and shifting administrations.
Reid cautioned that relying on 50 individual states with varying resources, political climates, and litigation expertise creates an uneven playing field against a single corporate opponent like Meta. Whether this record-setting penalty permanently alters state strategies depends on appeal outcomes and future legal challenges, though it undeniably resets expectations for what courts can deliver.
