New Mexico jury slaps Meta with $375M penalty

A New Mexico jury deemed Meta’s social media platforms harmful to children in a civil lawsuit. The verdict Tuesday is being hailed as what could be the first in a wave of lawsuits against the company.

The lawsuit was filed in New Mexico by the state’s attorney general, Raúl Torrez.

The decision levied a $375 million penalty against the company, ending a seven-week trial involving the owner of Facebook, Instagram and WhatsApp. The lawsuit had charged that Meta violated part of the state’s Unfair Practices Act.

Meta said in a statement that it “respectfully disagrees with the verdict” and will appeal.

A similar trial in Los Angeles Superior Court, which a jury is deliberating, skirted protections for social media companies on the basis of First Amendment and Section 230 of the Communications Decency Act by alleging that the social media platforms are “defective products.” Defective products are not afforded normal protections.

That lawsuit includes Meta and YouTube, as Deseret News recently reported. “The case involves a female, now 20 and identified only as KGM, who maintains she became addicted to social media at a young age and has been, at times, depressed and even suicidal as a result,” per that article.

Allegations and awards

Here are key takeaways from the New Mexico verdict:

• The primary claims were that Meta hurts children’s mental health and that the company deliberately hid what it knew about mental health challenges and the risk of sexual exploitation of children on the platforms. As NPR reported, “The jury agreed with allegations that Meta made false or misleading statements and also agreed that Meta engaged in ‘unconscionable’ trade practices that unfairly took advantage of the vulnerabilities of and inexperience of children.”
• Prosecutor Linda Singer “had urged jurors to impose a civil penalty that could exceed $2 billion against Meta, based on the maximum $5,000 penalty per violation on two counts of consumer protection violations, and an estimated 208,700 monthly users of Meta platforms under the age of 18 in New Mexico,” per the Associated Press.
• The jury’s penalty was reportedly based on a finding of 37,500 violations at $5,000 each and an equal amount of $187.5 million for “unconscionable practices.” Source NM said the 37,500 appears to represent one-fourth of the state’s teens.
• NPR noted that “Meta is valued at about $1.5 trillion. The company’s stock was up 5% in early after-hours trading following the verdict, a signal that shareholders were shrugging off the news and its potential impact on the company’s business.”

That’s not the end of the case in New Mexico, though. A second part starts May 4 on a public nuisance claim against Meta. The New Mexico Department of Justice wants First Judicial District Judge Bryan Biedscheid to make Meta pay more and also change the platform to better protect children.