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

Should states have sought more in their kids online safety settlement?

Should states have sought more in their kids online safety settlement?

by Lauren FeinerOct 27, 2026, 4:44 PM UTC Lauren Feiner is a senior policy reporter at The Verge, covering the intersection of Silicon Valley and Capitol Hill. She spent 5 years covering tech policy at CNBC, writing about antitrust, privacy, and content moderation reform.

When attorneys general from across the US announced a $17 billion settlement with Meta this summer, the sum was unprecedented. But a ruling last week by a New Mexico judge blew that number out of the water. The judge ordered Meta to pay $25 billion to resolve claims that Meta misled users around the 2018 Cambridge Analytica scandal and related incidents. Similar claims were resolved by the settlement with most other states. The outcome raised an obvious question: Should these states have asked for more?

The answer depends on a mix of factors, including whether the $25 billion order stands up to Meta’s legal challenges. Meta’s chief legal officer C.J. Mahoney said in a statement that the company is “confident we will prevail on appeal” and called New Mexico’s lawsuit an attempt to impose “a tax on speech.” If the fine sticks, however, it could create a new appetite for Big Tech’s opponents to stick it out in court — or ask for bigger payouts to settle.

“For the settling AGs, they’re going to look at this and maybe experience some regret for all the claims that they waived, and start looking around and trying to figure out what’s left that they didn’t waive, if they can try to get some money like this too,” says Daphne Keller, director of platform regulation at the Stanford Program in Law, Science & Technology. For the many individuals, school districts, and tribes with outstanding claims, “this is very encouraging and will make them hopeful that continuing to litigate aggressively will lead to a big payout,” Keller says.

The $25 billion court order covered millions of violations of New Mexico’s unfair practices law, after a jury found Meta had misled users about how it protected their data and policed misinformation and hate speech – claims stemming from the 2018 Cambridge Analytica scandal. In most states, such claims were covered by a section of the kids online safety settlement, resolved with a $459 million payment.

While that number looks comparatively puny, there were upsides to taking it. A settlement provided more certainty and an expedited payout for states even though Meta will be making the payments over 10 years. It also secured product commitments from Meta, like restrictions on teen usage, that might have been more difficult to get from a court ruling. And it allowed those to be implemented soon after the settlement was approved, which advocates say is important to prevent further harm to kids. Other state attorneys general also may have been working with different laws or evidence that could result in outcomes different from those obtained in New Mexico.

But New Mexico’s win, combined with other recent legal victories for AGs and private plaintiffs — including a separate judgment of nearly $1 billion against Meta in New Mexico — may embolden anyone still litigating privacy and kids online safety cases. “Assuming that even a fraction of this award gets upheld, then they clearly took pennies on the dollar compared to New Mexico,” Keller says of the settling states. Imagining she’s an AG with similar claims — like public false statements about privacy or content moderation — “I become less willing to settle in those cases,” Keller adds. “Or if I do settle, I ask for more.”

Florida Attorney General James Uthmeier, whose state avoided joining the Meta settlement, seemed to take the latest New Mexico ruling as a validation. “As I said at the time, the multi-state settlement with Meta was a slap on the wrist,” Utheimer wrote on X. “Florida isn’t going to sell out to Meta. We’re going to hold them accountable.” The District of Columbia could be the next place to test whether New Mexico’s win can be replicated since it did not settle its Cambridge Analytica claims and has continued pursuing its lawsuit in court.

While the AGs who joined the settlement can’t pursue covered claims against Meta anymore, they could still push for more in cases against other social media defendants, including TikTok, YouTube, and Snap. And those who weren’t part of the Meta settlement, including school districts and individuals, may be encouraged to continue pushing ahead. “Realistically, there’s so many cases, it’s not feasible that every single case can have an outcome like this,” says Keller. “Meta actually would go broke because the multipliers are so large. But any one, or 10, or 50 of them could hit the jackpot.”

States have stepped in to pursue tech policy and competition cases where the federal government has declined to, but the wide range of potential outcomes for each state presents its own challenges. As Congress has stalled on major tech policy bills and the Trump administration has often favored lighter regulation on tech, Colorado Law associate professor Blake Reid sees recent cases as a “move toward state-level tech policy.”

“The trick of that is, now you have 50 states that all have different sets of resources, and different sets of politics, and different sets of incentives, and frankly just different skill levels in terms of the sophistication that it takes to do litigation at this scale,” Reid says. “And it’s the same Meta, but now it’s up to 50 small opponents that are going to break in different ways.”

As for whether the $25 billion ruling makes other states rethink their strategy, Reid says there could be a range of approaches, depending partly on whether the figure is upheld on appeal and whether Meta loses yet more cases. “Is that a game that every state attorney general wants to play?” he asks. “And I think the settlement in the other case suggests maybe not.” Still, the new figure may change what AGs think they can achieve in court. And the more losses Meta and other tech companies rack up, the more ambitious they might get.

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