Meta has been ordered by a New Mexico state court to pay $567 million (€492 million) into a fund for teen mental health and overhaul how its platforms operate for young users after a judge found the company responsible for damaging children’s wellbeing.
Judge Bryan Biedscheid ruled in Santa Fe that Meta had created a public nuisance in New Mexico, agreeing with Democratic Attorney General Raúl Torrez.
Mr Torrez had alleged that Meta designed its products to foster addiction among young users while failing to adequately protect children from sexual exploitation on its platforms.
The decision follows a jury verdict five months earlier in which Meta was ordered to pay $375 million (€325 million) for violating consumer protection laws by misrepresenting the safety of Facebook and Instagram to young users.
Meta said it has been working to identify and remove harmful content from its platforms
The case is part of a broader wave of litigation. While many lawsuits have been filed by children and families over alleged individual harms, states, municipalities and school districts have increasingly pursued cases aimed at forcing industry-wide changes.
More than 40 states and over 1,300 school districts have brought public nuisance claims against social media companies, seeking financial damages and court orders requiring changes to products and business practices.
Under a decree that will remain in effect for five years, Judge Biedscheid ordered Meta to adopt a range of youth-safety measures. They include monthly limits on teenagers’ use of Facebook and Instagram, restrictions on notifications, stricter controls over adults contacting minors, safeguards for AI chatbots and enhanced reviews of reports involving child sexual abuse.
Meta said it would appeal the decision, adding that it has been working to detect and remove harmful material from its platforms.
“We remain confident in our record of protecting teens online and will continue to defend ourselves against claims that misrepresent the facts,” Meta said in a statement.
Mr Torrez said Meta had placed profit ahead of child safety and described the judgment as the first to compel a social media giant to make changes specifically aimed at protecting children.
“This is not just a judgment against one company. It is a blueprint,” Mr Torrez said.
“Now other states, and other countries confronting the same crisis, have a roadmap they can follow,” he added.
Raúl Torrez said in a statement that Meta chose profit over child safety
Reuters reported last year on internal company documents showing that Meta’s AI chatbots could “engage a child in conversations that are romantic or sensual”. The findings formed part of a wider investigation into allegations that Meta profited from advertisements promoting fraud and banned products.
In his ruling, Mr Biedscheid directed Meta to stop children in New Mexico from “engaging in romantic or sexualised interactions with Meta’s artificial intelligence chatbots”. He also ordered the company to prevent adults in the state from using chatbots to simulate or discuss sexualised interactions with children.
Judge Biedscheid heard three weeks of testimony during the lawsuit’s second trial, which was decided without a jury.
The proceedings dealt exclusively with whether Meta’s platforms amounted to a “public nuisance” under New Mexico law.
Public nuisance claims have traditionally been used against conduct that threatens public health or safety, including blocking roads or polluting waterways.
State governments, however, have also relied on the legal theory in cases involving tobacco, opioids, climate change, vaping and, more recently, artificial intelligence.
“Just as noxious pollution produced by the factory can harm the common public right to reasonably clean air, the harmful effects of Meta’s platforms on children do not stay contained by its platforms and, instead, migrate to the internet as a whole and, perhaps most concerning, to the real world and create a common, societal burden on and harm to the affected children and their families and schools, as well as hospitals and law enforcement,” Mr Biedscheid wrote.
Meta argued during the trial that it could not have created a public nuisance because it had not interfered with a “public right”, such as access to clean air or water.
The company also said New Mexico’s young residents use many other social media apps, arguing that the lawsuit failed to account for their influence.
Meta criticised the remedies sought by the state, saying in court filings that many of the proposed changes were “technologically impractical or completely impossible” and could potentially force it to leave New Mexico altogether.
Meta further argued that New Mexico’s claims were barred by Section 230 of the Communications Decency Act, the federal law that generally shields online platforms from liability for content created by users.
Judge Biedscheid rejected that argument, ruling that the state was challenging Meta’s platform design and features rather than attempting to hold the company liable as the publisher of third-party content.
However, Mr Biedscheid declined to order some of the remedies requested by New Mexico. He found that changes to Meta’s algorithms and features including infinite scroll and autoplay could violate the company’s First Amendment rights, damage its competitive position and conflict with Section 230.
‘Extremely significant’ ruling
Ireland’s online safety charity called the multimillion-dollar judgment against Meta “extremely significant”.
Speaking on RTÉ’s News at One, CyberSafeKids Chief Executive Alex Cooney compared the legal actions against Meta with public health litigation against the tobacco industry.
“The judge said (Meta) was a public nuisance akin to air pollution, that level of pervasiveness, the fact that it is just so harmful to a general population,” she said.
Meta has been ordered to establish a fund intended to reduce future harm, an approach Ms Cooney said was appropriate.
“The fine is significant and the funds are supposed to go towards addressing the harm,” she said.
“Interestingly, in this case, the judge stopped short of asking for real structural changes to the product, and that is because of Section 230, which has provided this protective shield to tech companies in the US for the past two decades,” she added.
“It essentially means (tech companies) are not liable for the content posted on their platforms, so even here now… it hasn’t gone quite as far as requiring them to make structural changes, which is what we need to see ultimately,” she said.
Ms Cooney said “momentum is building” for further action against major technology companies, with a “queue of further cases coming down the track”.
The ruling arrives as Meta prepares for a federal trial next week in Oakland, California, where 29 states allege that the company designed Facebook and Instagram to addict children and misled users about their safety. The case could expose Meta to massive damages.
The company is also defending a lawsuit filed by Tennessee, with that trial having begun in July.
Meta has warned investors that legal and regulatory pressure in the US and European Union over youth social media issues “could significantly impact our business and financial results”.
In April, the European Commission issued a preliminary finding that Meta allegedly failed to prevent children under 13 from accessing Instagram and Facebook.
The commission said Meta had not “diligently identify, assess and mitigate the risks of minors under 13 years old accessing their services”.
A Meta spokesperson said the company disagreed with the preliminary findings.
“We’re clear that Instagram and Facebook are intended for people aged 13 and older and we have measures in place to detect and remove accounts from anyone under that age,” the spokesperson said.
