A New Mexico jury found Meta liable for violating the state's consumer protection laws, ordering the company to pay $375 million in civil penalties. The verdict, delivered on Tuesday, concluded that Meta knowingly harmed children's mental health and concealed issues related to child sexual exploitation on its platforms, including Instagram, Facebook, and WhatsApp. This decision marks a significant legal setback for Meta, representing the first major courtroom loss for the tech giant amidst a growing number of lawsuits concerning the impact of social media on young people.
The jury's award of $375 million represents the maximum penalty of $5,000 per violation, across thousands of violations. This amount, however, is substantially less than the $2.2 billion prosecutors had initially sought. Despite the considerable penalty, Meta's stock rose 5% in early after-hours trading following the verdict, indicating that shareholders largely shrugged off the news. The company is valued at approximately $1.5 trillion, and the $375 million fine constitutes a fraction of its quarterly earnings.
The trial, which lasted nearly seven weeks, was brought by the New Mexico Attorney General. Jurors deliberated for less than a day before reaching their decision. Meta has stated its intention to appeal the ruling, with a company spokesperson accusing the Attorney General of making "sensationalist, irrelevant arguments." A second phase of the trial, scheduled for May, will determine whether Meta's social media platforms created a public nuisance and if the company should fund public programs to address the identified harms. This verdict is seen as a landmark decision, signaling a shift in how tech companies are being held accountable for their platforms' effects on young users.
