How Might Meta Be Affected by the $567 Million Verdict in New Mexico?

In a growing wave of U.S. lawsuits over allegations that social media hurts youth, a New Mexico state court ordered Meta Platforms (META.O), the owner of Facebook and Instagram, to make significant modifications to its platforms and pay the highest amount to date.

Here is a look at the choice and its possible outcomes.

WHAT DOES META HAVE TO PAY?

On Thursday, the Santa Fe court ordered Meta to contribute $567 million to a New Mexico fund for the prevention and treatment of adolescent mental illness.

A jury in a previous round of the litigation granted New Mexico $375 million for related consumer protection claims.

The $942 million total considerably outweighs earlier fines in youth-related social media lawsuits, such as the $6 million judgment against Meta and Alphabet’s (GOOGL.O) YouTube owner Google in a California case in March.

Meta stated that it will appeal the decision and that the claims were false.

WHAT ARE THE CHANGES THAT THE COURT ORDERED META TO MAKE?

Judge Bryan Biedscheid in Santa Fe mandated that Meta put policies in place for New Mexico users that are meant to safeguard children on Facebook and Instagram. Other states are unaffected by the decision.

Meta needs to implement stricter age verification, limit users under the age of 18 to 90 hours per month, and disable push notifications at nite and during school hours.

According to the law, parents must provide their permission for the quantity of “likes” on a child’s post to be displayed.

Additionally, Meta must prohibit sexualized chatbot interactions with children and obscure photographs that appear to contain nudity.

Some of the improvements that New Mexico asked for were denied by the judge, including adjustments to Meta’s algorithms and features like autoplay videos and infinite scroll. During the trial, the corporation claimed that several of the state’s requested improvements were not technically feasible and might cause it to leave the state.

WHAT WAS THE JUDGE’S DECISION BASED ON?

In ruling that Meta constituted a public nuisance, Biedscheid agreed with New Mexico’s allegations that Facebook and Instagram were built in a way that made young users addicted and failed to sufficiently shield them from sexual exploitation.

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