Meta ordered to pay record $25 billion over Facebook privacy as Q3 revenue jumps 26%
A New Mexico judge set the biggest penalty ever against Facebook's owner over the Cambridge Analytica scandal. Hours later, Meta reported $64.6 billion in quarterly revenue, but legal costs cut its profit.
At a glance
- A New Mexico judge ordered Meta to pay $25 billion for deceiving Facebook users about their privacy — the largest penalty ever imposed on the company.
- A jury had found more than 43 million violations of state consumer law linked to the Cambridge Analytica data scandal; Meta says it will appeal.
- The same day, Meta reported Q3 revenue of $64.6 billion, up 26%, above forecasts.
- A $9.89 billion legal charge pushed operating income down 37% to about $13 billion; earnings were $3.83 a share.
A judge in the US state of New Mexico has ordered Meta to pay $25 billion for deceiving Facebook users about the privacy of their data — the largest penalty ever imposed on the company. The ruling came on Wednesday, October 21, the same day Meta reported a 26% jump in quarterly revenue to $64.6 billion, although huge legal costs cut deep into its profit.
The $25 billion ruling
Judge Francis Mathew set the amount after a jury in September found Meta liable for more than 43 million violations of New Mexico's consumer protection law. In his ruling, the judge wrote that Facebook's promise that users controlled their own data "was false".
| Amount | |
|---|---|
| Penalty ordered | $25 billion |
| What New Mexico asked for | $35–40 billion |
| What Meta said was the maximum fair amount | $3.4 billion |
| Theoretical maximum under state law | more than $219 billion |
| Previous record (US FTC fine, 2019) | $5 billion |
What the case was about
New Mexico sued in 2021 over the Cambridge Analytica scandal. In 2016, a personality quiz app harvested data from about 87 million Facebook profiles, which was then passed to the political consulting firm Cambridge Analytica and used for targeted election advertising. The state argued Facebook misled users about how secure their information was and about how it moderated content.
Jurors found misleading statements on privacy, but did not find that Facebook made false claims about removing harmful content such as COVID-19 misinformation.
Reactions
New Mexico Attorney General Raúl Torrez called the judgment "an unambiguous message to Silicon Valley". Under the state constitution, consumer protection fines go to education, and Torrez said the money could pay for school construction for decades — though he accepted it will be tied up during the appeal.
Meta has said it will appeal. In court, its lawyers argued that a penalty of $40 billion would be "shocking to the conscience". The company could also ask higher courts to reduce the number of violations counted.
Meta's third-quarter results
Hours later, Meta reported results for July–September 2026:
| Q3 2026 | Change | |
|---|---|---|
| Revenue | $64.6 billion | +26%; forecasts ≈ $63.3bn |
| Operating income | about $13.0 billion | –37% |
| Operating margin | 20% | down from 40% |
| Net income | $9.86 billion ($3.83 a share) | year-ago figure hit by a one-off tax charge |
| Legal charge | $9.89 billion | social media addiction settlement with US states |
| Capital spending | $34.9 billion | up from $19.4bn a year earlier |
| Daily users across its apps | 3.64 billion | +3% |
Excluding the legal charge, earnings would have been $7.40 a share, well above forecasts. Ad prices rose 14% and the number of ads shown rose 10%.
The legal charge relates to a settlement with US states, agreed in August, over claims that Meta's apps harmed teenagers. New Mexico and Florida did not join that deal.
Spending on AI
Meta now expects to spend $135–145 billion on capital investment in 2026, almost all of it on AI data centres. That spending turned its free cash flow negative ($2.1 billion) for the quarter. Meta expects fourth-quarter revenue of $73–76 billion and also announced plans for a new class of shares.
Why it matters
The ruling shows US states are now winning record sums from big technology companies over privacy, separate from federal regulators. For the 3.6 billion people who use Facebook, Instagram and WhatsApp — including well over 100 million in Pakistan and India — it adds pressure on Meta to be clearer about how personal data is used.
What happens next
Meta's appeal will go to New Mexico's higher courts and could take years. New Mexico is also asking the court for an order to stop similar practices in future. Investors will watch whether Meta's AI spending starts paying off in its next results, due in late January 2027.
Questions people are asking
Why was Meta fined $25 billion?
A New Mexico judge ruled that Facebook misled users about how well their personal data was protected, linked to the 2016 Cambridge Analytica scandal in which data from about 87 million profiles was harvested. A jury had found more than 43 million violations of state consumer law.
Will Meta have to pay the $25 billion now?
Not yet. Meta has said it will appeal, so the money will be tied up while the case goes through higher courts. Interest builds up during the appeal.
How much revenue did Meta make in Q3 2026?
Meta reported revenue of $64.6 billion for July–September 2026, up 26% on a year earlier, and earnings of $3.83 a share after a $9.89 billion legal charge.
