Meta’s $25 billion legal loss just put blood in the water

The default for settling privacy claims against Meta is now $25 billion, not the previous $17 billion multi-state agreement.

A New Mexico judge has ordered Meta to pay $25 billion to settle claims that the company misled users regarding data protection and content moderation following the 2018 Cambridge Analytica scandal. This ruling significantly surpasses the $17 billion settlement Meta reached with most other US states earlier this summer for similar claims. Meta has stated confidence in prevailing on appeal, calling the lawsuit a "tax on speech." If the $25 billion judgment stands, it could encourage other states and private plaintiffs with outstanding claims to pursue more aggressive litigation or demand larger settlement amounts. This outcome contrasts with the broader settlement, which secured product commitments from Meta, such as restrictions on teen usage, in addition to a monetary payment. While the multi-state settlement offered more certainty and quicker payment, the New Mexico ruling suggests a potentially higher valuation for unresolved claims.

The $25 billion ruling by a New Mexico judge suggests that states with unresolved claims related to the Cambridge Analytica scandal or similar privacy and misinformation issues may have significantly underestimated their potential payouts. Attorneys general who settled for less may regret waiving claims, potentially seeking to re-evaluate what was settled or pursue claims against other tech companies. This emboldens individuals, school districts, and tribes with outstanding litigation, creating a more challenging legal landscape for Big Tech. The disparity highlights the varying outcomes possible when states pursue litigation independently versus coordinated settlements.

This development signals a growing trend of state-level tech policy enforcement, particularly in the absence of federal action. However, the fragmented approach, with 50 states possessing different resources and legal sophistication, creates unpredictable outcomes. The high stakes demonstrated by the New Mexico case could lead to more ambitious litigation strategies across states, potentially forcing tech companies into costly and complex legal battles that could individually break them, even if not all states pursue such aggressive actions.