Meta Hit With $25 Billion Penalty in New Mexico as It Reports Strong Sales

Meta Platforms had a split-screen Wednesday. A New Mexico judge ordered the company to pay $25 billion for misleading Facebook users about their privacy, and on the same day Meta reported quarterly revenue that beat Wall Street’s expectations and announced plans to issue a new class of stock that carries no voting rights.

State District Judge Francis Mathew imposed the penalty after a jury found last month that Meta committed more than 43 million violations of New Mexico’s consumer protection law, NBC News and Al Jazeera reported, citing Reuters and the Associated Press. Jurors concluded that 26 of 29 statements by the company and its leaders about privacy and content moderation were misleading. Mathew calculated that state law would allow a penalty of more than $219 billion but reduced it to $25 billion, writing that Facebook had promised users they controlled their data and that this was false.

The penalty is the largest ever imposed on Meta, well above the $5 billion the Federal Trade Commission levied in 2019. New Mexico Attorney General Raúl Torrez, who filed the case in 2021 after revelations that the consulting firm Cambridge Analytica had obtained data from as many as 87 million Facebook users, said the money will go to the state’s schools. Meta argued that a penalty that large was excessive and that the state had not proven any consumer was misled. Its chief legal officer, CJ Mahoney, said the company was confident it would win on appeal, according to Al Jazeera.

The quarterly numbers showed a business still growing quickly. Revenue rose 26 percent from a year earlier to about $64.6 billion, above analysts’ estimates, SiliconANGLE reported. Operating income fell, however, because of a $9.89 billion charge tied to the company’s August settlement with state attorneys general over claims that its platforms harmed teenagers’ mental health, which cut the operating margin to about 20 percent from 40 percent.

Meta also forecast fourth-quarter revenue of $73 billion to $76 billion and narrowed its expected capital spending for 2026 to $135 billion to $145 billion, much of it for artificial intelligence data centers, Bloomberg and SiliconANGLE reported.

The company’s board approved a new class of publicly traded Class C shares with no voting rights, to be distributed as a dividend of one share for each existing Class A and Class B share starting in January 2027, Meta said. The company said the shares would help it raise capital, pay employees and fund acquisitions, and that the change would not alter any shareholder’s voting power. It would, however, let Meta raise money by selling stock without diluting Mark Zuckerberg’s control, which SiliconANGLE put at about 61 percent of the vote.

Analysts said the New Mexico penalty, while costly, was unlikely to change Meta’s long-term value. Gil Luria of D.A. Davidson told Reuters that Meta is worth nearly $2 trillion and would likely keep appealing and drag the cases out, according to Wealth Professional’s account of the Reuters report.