When attorneys general across the United States announced a $17 billion settlement with Meta this summer, the sum was unprecedented. But a ruling by a New Mexico judge last week threw out that figure. The judge ordered Meta to pay $25 billion to resolve allegations that Meta misled users surrounding the 2018 Cambridge Analytica scandal and related incidents. Similar claims were resolved by agreements with most other states. The result raised an obvious question: Should these states have asked for more?
The answer depends on a combination of factors, including whether the $25 billion order withstands legal challenges from Meta. Meta’s chief legal officer, CJ Mahoney, said in a statement that the company is “confident that we will prevail on appeal” and called New Mexico’s lawsuit an attempt to impose “a tax on speech.” However, if the fine stands, it could create new appetite among Big Tech’s opponents to hold out in court or ask for larger payments to settle.
“The AGs who settle will look at this and maybe regret all the claims they gave up, and they’ll start to look around and try to figure out what’s left that they didn’t give up, if they can try to get some money like this too,” says Daphne Keller, director of platform regulation at Stanford’s Law, Science and Technology Program. For the many people, school districts and tribes with pending claims, “this is very encouraging and will give them hope that continuing to litigate aggressively will lead to a large payout,” Keller says.
The $25 billion court order covered millions of violations of New Mexico’s unfair practices law, after a jury found that Meta had misled users about how it protected their data and controlled misinformation and hate speech, claims stemming from the 2018 Cambridge Analytica scandal. In most states, such claims were covered by a section of the online child safety settlement, settled with a $459 million settlement.
While that number seems comparatively insignificant, taking it had its advantages. An agreement provided more certainty and accelerated payment for states even though Meta will make payments over 10 years. It also secured product commitments from Meta, such as restrictions on teen use, that could have been more difficult to obtain through a court ruling. And it allowed them to be implemented soon after the deal was approved, which advocates say is important to prevent further harm to children. Other state attorneys general may also have been working with different laws or tests that could lead to different results than those obtained in New Mexico.
“Assuming even a fraction of this award is upheld, then they clearly charged pennies on the dollar compared to New Mexico.”
But New Mexico’s victory, combined with other recent legal victories for attorneys general and private plaintiffs (including a separate nearly $1 billion judgment against Meta in New Mexico) may embolden anyone still litigating child online privacy and safety cases. “Assuming even a fraction of this award is upheld, then they clearly charged pennies on the dollar compared to New Mexico,” Keller says of the states that settled. By imagining she is an attorney general with similar claims, such as false public statements about privacy or content moderation, “I become less willing to settle those cases,” Keller adds. “Or if I settle, I ask for more.”
Florida Attorney General James Uthmeier, whose state avoided joining the Meta agreement, appeared to take New Mexico’s latest ruling as validation. “As I said at the time, the multistate agreement with Meta was a slap on the wrist,” Utheimer wrote in X. “Florida will not sell out to Meta. We will hold them accountable.” The District of Columbia could be the next place to test whether New Mexico’s victory can be replicated, as it did not settle its Cambridge Analytica claims and has continued its lawsuit in court.
“Anyone, 10 or 50 of them could hit the jackpot.”
While the attorneys general who joined the settlement can no longer bring covered claims against Meta, they could still push for more in cases against other social media defendants, including TikTok, YouTube and Snap. And those who were not part of the Meta agreement, including school districts and individuals, can be encouraged to move forward. “Realistically, there are so many cases that it’s not feasible that every case could have an outcome like this,” Keller says. “Meta would actually go bankrupt because the multipliers are so big. But anyone, 10 or 50 of them could win the jackpot.”
States have intervened to implement technology policies and competition cases where the federal government has refused, but the wide range of potential outcomes for each state presents its own challenges. As Congress has stalled on major technology policy bills and the Trump administration has often favored lighter technology regulation, Colorado Law Associate Professor Blake Reid sees the recent cases as a “movement toward state-level technology policy.”
“The trick to this is that we now have 50 states that have different sets of resources, different sets of policies, different sets of incentives and, frankly, different levels of skill in terms of the sophistication that is needed to litigate at this scale,” Reid says. “And it’s the same Meta, but now there are up to 50 small opponents that are going to break in different ways.”
As to whether the $25 billion ruling causes other states to reconsider their strategy, Reid says there could be a variety of approaches, depending in part on whether the figure is upheld on appeal and whether Meta loses even more cases. “Is that a game every state attorney general wants to play?” ask. “And I think the agreement in the other case suggests maybe not.” Still, the new figure may change what prosecutors believe they can achieve in court. And the more losses Meta and other tech companies rack up, the more ambitious they could become.
