Topline

A judge in New Mexico ordered Facebook and Instagram’s parent company Meta to pay a total of $942 million in fines for creating a “public nuisance” over its handling of child safety on its social media platforms and being a “significant” contributor to the state’s teen mental health crisis.

Key Facts

The ruling by a Santa Fe state court judge orders Meta to pay $567 million into an abatement fund to help pay for awareness and prevention measures, better screening and treatment of those who have been harmed by the platform.

The payment towards the fund is in addition to $375 million in civil penalties against the company previously ordered by a jury in the case—bringing the total penalty amount to $942 million.

The judge’s 68-page ruling noted that Meta implemented platform features designed to “optimize engagement” and are “harmful to teenagers,” and it failed to “adequately” communicate the risk to its users.

The judge said that based on the evidence provided, the court finds Meta’s platforms are “a cause of and have substantially contributed to a public nuisance in New Mexico.”

Meta’s shares were largely flat in premarket trading on Monday, down around 0.33% to $587.94.

Crucial Quote

The ruling compared Meta to a polluting factory and said: “the Court finds and concludes that, 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.”

What Has New Mexico’s Attorney General Said About The Ruling?

After the ruling, the state’s Attorney General Raul Torrez issued a statement saying: “This case has always been about protecting children, standing up for families, and making sure that one of the world’s largest technology companies cannot profit from practices that endanger young people without consequence. 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.”

How Has Meta Responded?

In a post on X, Meta’s communications chief Andy Stone wrote: “We disagree with the ruling and will appeal. 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. We remain confident in our record of protecting teens online and will continue to defend ourselves against claims that misrepresent the facts.”

big number

$2.4 billion. That is the total charges linked to various legal proceedings involving Meta in the second quarter of this year, the company said its latest earnings report last month. A press release accompanying the earnings, noted that the company continues to monitor “active legal and regulatory matters that could significantly impact our business and financial results. For example, we continue to see scrutiny on youth-related issues in several markets and have a number of youth-related trials scheduled for this year in the U.S., which may ultimately result in a material loss.”