Court orders Meta to pay $25 billion in New Mexico privacy case
Key Facts
A New Mexico court ordered Meta to pay $25 billion in civil penalties to the state in a privacy case linked to Cambridge Analytica, according to the state Department of Justice's announcement of the ruling issued on October 21, 2026. The order was based on violations of New Mexico's Unfair Practices Act, after a jury found Facebook liable for breaches of the law. The department said the jury found the company had committed 43,899,725 violations, a verdict that preceded the determination of the civil penalty. According to Reuters, the judge found that applying state law justified penalties exceeding $219 billion. He nevertheless reduced the amount to the penalty imposed in his court order. The ruling coincides with Meta's quarterly results, which included a separate legal expense and negative free cash flow, alongside projections for high capital spending during the year.
The New Mexico lawsuit extended beyond the Cambridge Analytica incident itself to cover what Facebook told consumers about its handling of their data, according to the state Department of Justice. The lawsuit also addressed the company's statements about its efforts to tackle misinformation and hate speech, as part of its challenge to how those practices were represented to consumers. According to the state attorney general, in comments reported by Reuters, New Mexico law directs all penalty proceeds to the state's school system. Meta's chief legal officer, C.J. Mahoney, said the company would appeal the ruling. Mahoney said the company was "confident of winning on appeal," according to Reuters.
On the business front, Meta's revenue grew 26% year on year in the third quarter of 2026, according to the Associated Press. Revenue reached $64.60 billion, compared with $51.24 billion in the third quarter of 2025. The results included a $9.89 billion legal expense related to the settlement of lawsuits concerning teenagers' mental health, according to Investing coverage. That expense is separate from the civil penalties imposed in the New Mexico privacy case and relates to the settlement of lawsuits distinct from the Cambridge Analytica-linked case. On its earnings call, the company said third-quarter free cash flow was negative by about $2.1 billion. In the market, META shares closed the October 21 session at $697.52, up from the previous session's close of $694.25, according to EL7 data. The stock then fell more than 1% in premarket trading on October 22, according to Investing coverage updated that day.
Alongside the earnings announcement, Meta's board approved the creation of a new class of non-voting common stock, Class C. Under the announced arrangement, shareholders will receive one share of the new class for each outstanding Class A and Class B share they own, according to the company's earnings statement. The distribution is contingent on the amendment to the company's charter required to create the new class taking effect. The distribution of non-voting shares does not change shareholders' voting power, as the arrangement grants them shares in the new class based on their existing holdings. The company set January 19, 2027, as the effective date for the new class, according to Investing coverage of the board's decision.
Looking ahead, Meta expects revenue of between $73 billion and $76 billion in the fourth quarter of 2026, according to the Associated Press. On spending, the company narrowed its 2026 capital expenditure forecast to between $135 billion and $145 billion, according to the earnings call transcript. Its previous forecast put spending at between $130 billion and $145 billion for the same year. The lower end of the forecast range therefore rose, while the upper end remained unchanged in the annual guidance. These projections include principal payments on finance leases, alongside the capital expenditures the company cited on its third-quarter earnings call.