Meta Ordered to Pay $567 Million in Second Phase of Landmark Trial
A court in New Mexico has mandated that Meta, the parent company of Instagram and Facebook, pay $567 million. This is to address the negative effects on young users of its platforms following a landmark trial. Judge Bryan Biedscheid ruled late Thursday that the majority of this fund, amounting to $420 million, will be allocated towards treatment services for young people. The remaining funds will focus on awareness, prevention, and screening services over the next five years.
This judgment adds to the $375 million in civil penalties imposed in March when jurors concluded Meta knowingly endangered children’s mental health and hid its knowledge of child sexual exploitation on its platforms. During the second phase of the trial, prosecutors sought to enforce fundamental changes at Meta. These changes aim to manage addictive features, enhance age verification, and prevent child sexual exploitation through default privacy settings and stringent supervision.
The combined total that Meta must pay, which reaches $942 million, is minimal compared to its $60 billion annual profit in 2025. In after-hours trading on Thursday, investors appeared indifferent to the ruling, as Meta’s stock decreased by less than half a percent to $589.44. Nonetheless, the decision represents another challenge for Meta, which is facing numerous lawsuits from thousands of families affected by social media-induced harm to children.
New Mexico Attorney General Raúl Torrez stated that this ruling delivers a clear message that companies will be accountable for knowingly putting children at risk. “Today’s decision is a victory for every parent who has worried about what social media is doing to their child and every child who deserves to grow up safer online,” he mentioned in a statement.
Meta has announced plans to appeal. They stated, “We work hard to keep people safe on our platforms and have been transparent about the challenges of identifying and removing bad actors and harmful content.” Meta expressed confidence in their record of protecting teens online and intends to defend against claims that misrepresent the facts.
The Future Look of Meta’s Platforms
The judge instructed Facebook and Instagram to introduce banner and informational screens. These will clearly explain their protection features, best practices, tools for addressing inappropriate comments, and will be displayed regularly. The effectiveness of these modifications and an educational campaign in New Mexico will undergo review by the state.
The court pointed out that federal children’s privacy laws, such as the Children’s Online Privacy Protection Act (COPPA), restrict Meta from implementing age-verification tools on children under 13. This law prohibits requesting personal data or tracking children under 13 online, even for age verification. It was also noted that enforcing age verification only for Meta, excluding other social media companies, would be unfair and potentially damaging to Meta.
Instead, the court has ordered Meta to continue enhancing its age assurance tools in New Mexico. These tools include leveraging artificial intelligence to gauge users’ ages based on indicators like their contacts and content interactions. Meta is also expected to develop a model to predict users under 13 within two years.
Furthermore, Meta should request proof of age from New Mexico users it estimates to be under 13. If a user is determined as under 13, or under 18 with an indeterminable specific age, Meta must treat them accordingly until proper age verification is submitted. The company must also partner with schools or child safety organizations to establish a reporting portal where school personnel can flag users suspected to be under 13. Additionally, Meta must delete personal data collected from users under 13. The court also demands that Meta report biannually on its compliance with these abatement measures.
Meta Faces Ongoing Legal Challenges
Later this month, Meta will confront a trial in federal court in Oakland, California. This trial involves four of the 29 states that filed a federal multi-district lawsuit in 2023. The lawsuit accuses Meta of contributing to a youth mental health crisis by designing features on Instagram and Facebook that addict children.
Eight states, including Tennessee where a trial is already ongoing, filed separate lawsuits in their state courts. Recently, Meta, along with TikTok, Snap, and Google’s YouTube, faced lawsuits filed by families of four teenagers who died by suicide, attributing the “years of escalating harms” from the platforms as the cause.
Laura Edelson, an assistant professor at Northeastern University with expertise in social media and cybersecurity, remarked, “What comes out of New Mexico is the first of many dominoes that will fall for Meta.” She added that while America may not ban social media, states are finding ways to curb the harm caused by social media companies’ product designs.