Meta could face one of the largest corporate penalties in US history after a New Mexico jury found Facebook repeatedly misled consumers about how their personal information was collected, protected, shared and used. The state is seeking as much as US$40 billion, but the final penalty has yet to be determined and Meta argues the proposed amount is excessive.
INR Report: Based on reporting by RT HERE
A privacy case originating in the Cambridge Analytica scandal has developed into potentially one of the most expensive corporate legal battles in US history.
A Santa Fe jury found that Facebook made false or misleading statements to New Mexico consumers concerning the collection, protection, sharing and use of their personal information. The New Mexico Department of Justice says the jury identified 43,899,725 violations of the state's Unfair Practices Act.
The verdict establishes liability, not the final financial penalty.
New Mexico is now asking Judge Francis Mathew to impose approximately US$35 billion to US$40 billion in civil penalties. Meta argues the amount is disproportionate and has proposed that any penalty should be substantially lower.
The judge is expected to determine the amount later this month.
From Cambridge Analytica to 43 Million Violations
The case reaches back to the Cambridge Analytica scandal that became public in 2018.
The British political consultancy obtained Facebook information involving tens of millions of users through a third-party application. That data was subsequently used for voter profiling and political targeting, including work associated with Donald Trump's 2016 presidential campaign.
The controversy raised a fundamental question about Facebook's business model: how much control did users genuinely have over personal information collected within an ecosystem built around data-driven advertising?
New Mexico's case went further than the original Cambridge Analytica allegations.
According to Reuters, jurors considered 29 statements made by Facebook and concluded that 26 were misleading, producing more than 43 million individual violations under state consumer-protection law.
The New Mexico Department of Justice said the jury found that Facebook knowingly made false or misleading statements, or engaged in conduct exploiting consumers' lack of knowledge to an unfair degree.
Meta disputes the state's interpretation and proposed penalty.
Why $40 Billion Is Possible
The enormous potential penalty results from the way New Mexico's Unfair Practices Act operates.
Civil penalties can reach US$5,000 for each willful violation. Multiplying that maximum by more than 43 million violations would theoretically produce a figure vastly greater than the US$35 billion to US$40 billion now being sought.
The state has instead proposed a considerably lower amount.
Meta argues even that figure is excessive. According to Reuters, the company has argued that the state failed to demonstrate corresponding consumer harm and has suggested a maximum penalty of around US$3.45 billion.
The difference is therefore substantial.
The jury has already decided the liability question. What remains unresolved is how the judge translates tens of millions of violations into a constitutionally proportionate financial penalty.
Meta's New Mexico Problems Go Much Further
This is not Meta's only major case in New Mexico.
Earlier this year, a separate jury found Meta liable for 75,000 violations involving allegations that it misled consumers about the safety of its platforms and endangered children.
That jury imposed US$375 million in civil penalties.
A subsequent court ruling ordered Meta to contribute another US$567 million toward a youth mental-health fund and imposed changes to the operation of Facebook and Instagram for younger users.
Combined, those earlier proceedings created financial exposure of approximately US$942 million in New Mexico before the latest privacy case is resolved.
Meta has challenged the findings and said it will appeal aspects of the litigation.
A Much Bigger US Reckoning
The pressure extends far beyond New Mexico.
In August, Meta reached agreements worth up to US$18 billion over ten years with nearly all US states to resolve claims alleging that Facebook and Instagram were deliberately designed in ways that contributed to harmful or addictive use among children.
The agreements also impose restrictions on how teenagers can use the platforms.
New Mexico did not resolve its current privacy case through that settlement, allowing its litigation to continue independently.
The result is an unusual situation in which one US state is testing how far traditional consumer-protection law can be applied to the conduct of one of the world's largest digital platforms.
Data Is the Real Asset
The significance of the case extends beyond one corporate penalty.
Facebook, Instagram and many other digital platforms are free at the point of use because their commercial value is built substantially around information about users and their behaviour.
Every interaction can contribute to a profile: interests, relationships, location indicators, browsing behaviour, purchasing interests, political engagement and advertising responses.
That information allows advertisers to target audiences with extraordinary precision.
Cambridge Analytica demonstrated how the same infrastructure developed for commercial advertising could also be applied to political profiling and messaging.
The New Mexico case consequently raises a deeper question than whether Facebook's privacy statements were technically accurate.
It asks whether users were given an accurate understanding of the bargain they were entering when they supplied personal information to the platform.
The Regulatory Equation Is Changing
For the largest technology companies, conventional regulatory fines can become little more than a cost of doing business if the penalty is small relative to revenue.
New Mexico is testing a different model.
Instead of imposing a single penalty for corporate misconduct, the state has tied potential liability to the number of statutory violations.
That dramatically changes the economics.
A misleading representation affecting millions of people can potentially become millions of violations rather than one corporate offence.
Whether the courts ultimately accept penalties approaching US$40 billion remains unresolved. Meta's proportionality and due-process arguments are likely to be central to that decision and any subsequent appeal.
But the jury verdict has already established something significant: consumer privacy representations made by a global technology platform can create enormous legal exposure when applied individually across millions of users.
Does This Affect New Zealand?
Yes, because New Zealanders use the same global platforms and generate the same categories of commercially valuable personal information.
Under the Privacy Act 2020, organisations operating in New Zealand are subject to principles governing how personal information is collected, stored, used and disclosed. From May 2026, new Privacy Principle 3A also introduced notification requirements covering certain personal information obtained indirectly rather than directly from the individual.
The broader public concern is already substantial.
The Office of the Privacy Commissioner's 2026 annual privacy survey found that 65 percent of New Zealanders were concerned about how social-media companies manage personal information. Children's privacy on social media was an even greater concern, at 71 percent.
The New Mexico case therefore presents New Zealand with a useful regulatory comparison.
The central issue is not whether New Zealand should reproduce an American penalty. The two countries operate under different legal systems and consumer-protection frameworks.
The more important question is whether individuals have meaningful knowledge and control over the information they exchange for access to digital platforms.
For New Zealand users, that includes understanding what information is collected, how long it is retained, whether it is combined with information obtained elsewhere, how it influences advertising and algorithmic decisions, and who ultimately receives access to it.
The Cambridge Analytica scandal showed what can happen when those boundaries become unclear.
Eight years later, a New Mexico jury has transformed that historical controversy into more than 43 million findings of consumer-law violations.
The eventual penalty will determine how expensive those findings become for Meta.
The wider question for New Zealand is whether privacy law can keep pace with an economic model in which personal information itself has become one of the world's most valuable commercial resources.
Independent reporting. Original context. Credited sources.
Source
RT, 2 October 2026: Meta faces $40bn data privacy penalty
Reuters, 1 October 2026: New Mexico wants Meta to pay up to $40 billion after data privacy trial
New Mexico Department of Justice, 25 September 2026: Jury Finds Facebook Violated New Mexico Consumer Protection Law
New Zealand Office of the Privacy Commissioner: Privacy Act 2020
New Zealand Office of the Privacy Commissioner, 11 May 2026: 2026 annual survey on privacy