Meta Platforms, Inc. (NASDAQ: META) faces a potential $35 billion to $40 billion financial penalty after New Mexico attorneys made a formal request before Judge Francis Mathew in Santa Fe.
The state’s attorneys presented the penalty request on Thursday, following a jury verdict on September 25 that found Meta had misled consumers about how it handled their Facebook data.
Judge Mathew, who presided over the trial, is expected to decide the penalty amount later this month, according to Reuters.
The case stems from a 2021 lawsuit filed by New Mexico against Meta in the wake of the Cambridge Analytica scandal, which revealed that the British political consulting firm obtained personal data from as many as 87 million Facebook users through a third-party app without their consent.
Cambridge Analytica also worked on Donald Trump’s 2016 presidential campaign, adding political weight to the long-running legal battle over data privacy practices.
Jurors examined 29 statements made by Meta and its leadership, finding 26 of them misleading, and determined that Meta violated New Mexico’s consumer-protection laws more than 43 million times.
Meta has pushed back forcefully against the proposed penalty, calling it “astronomical” and urging Judge Mathew to cap the amount at $3.45 billion, according to court filings cited by Reuters.
The company argued that trial evidence did not establish that it sold users’ data or that any consumer was actually misled by its representations about privacy.
Despite the legal headwinds, Meta shares have shown considerable strength, with the stock rising 27% in September, the largest monthly gain since July 2013, as investors focus on the company’s artificial intelligence strategy.
Meta launched its Muse AI assistant in September, subsequently adding integrations with various digital services and its newly released Meta VR glasses, as the company looks to AI products to drive new revenue streams.
At a White House meeting with President Donald Trump and other major AI executives earlier this week, Meta CEO Mark Zuckerberg said the companies had agreed to build “robust internal controls” for AI systems, alongside multiple layers of internal risk reviews, external audits and evaluations.
Zuckerberg described the voluntary agreement as a starting point for industry-wide AI safety standards, amid growing debate over AI safety and so-called “AI doomsday” scenarios.
On Stocktwits, retail sentiment for META dipped into the “neutral” zone, though some investors remain upbeat about the platform’s momentum, with Sean Emory, founder and chief investment officer at Avory and Co., noting that Muse remained the top AI assistant while two of Meta’s newer apps rank among the six most downloaded platforms.
META stock rose 0.1% during Thursday’s session and gained an additional 0.4% in overnight trading, suggesting markets are currently treating the looming penalty as a manageable risk against the company’s broader AI-driven growth narrative.
