financetom
Business
financetom
/
Business
/
EXPLAINER-How could New Mexico's $567 million ruling change Meta?
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
EXPLAINER-How could New Mexico's $567 million ruling change Meta?
Aug 7, 2026 12:55 PM

Aug 7 (Reuters) - A New Mexico state court ordered Meta

Platforms ( META ), owner of Facebook and Instagram, to make

major changes to its platforms and pay the largest sum yet in a

growing wave of U.S. litigation over claims that social media

harms young people.

Here is a look at the decision and its potential

consequences.

HOW MUCH MUST META PAY?

The court in Santa Fe ruled on Thursday that Meta must pay

$567 million into a New Mexico fund for teen mental health

prevention and treatment.

In an earlier phase of the case, a jury awarded New Mexico

$375 million on related consumer protection claims.

The combined $942 million far exceeds other penalties in

youth-related social media cases including a $6 million verdict

against Meta and Alphabet's Google, owner of YouTube,

in a California case in March.

Meta said the claims misrepresented the facts and that it

will appeal the ruling.

WHAT CHANGES DID THE COURT ORDER META TO MAKE?

Judge Bryan Biedscheid in Santa Fe ordered Meta to implement

measures for users in New Mexico intended to protect youth on

Facebook and Instagram. The ruling does not affect other states.

Meta must introduce more stringent age verification,

restrict users under 18 to no more than 90 hours a month and

shut off push notifications overnight and during school hours.

Parents must consent to the number of "likes" on a child's post

being shown, the ruling said.

Meta must also ban sexualized chatbot interactions with

minors and blur images suspected of containing nudity.

The judge rejected some of the changes New Mexico requested,

including modifications to Meta's algorithms and features such

as infinite scroll and autoplay videos. The company said during

the trial that some changes the state sought were not

technologically possible and could force it to exit the state.

WHAT WAS THE BASIS OF THE JUDGE'S DECISION?

Biedscheid ruled that Meta created a public nuisance,

agreeing with New Mexico's claims that Facebook and Instagram

were designed in ways that addicted young users and did not

adequately protect them from sexual exploitation.

Reuters last year reported on company documents ​that showed

Meta's AI chatbots could "engage a child in conversations that

are romantic or sensual."

The judge rejected Meta's call to dismiss the case under

Section 230 of the Communications Decency Act, which generally

shields online platforms from liability over user content.

WHAT IS A PUBLIC NUISANCE?

Public nuisance claims traditionally have been used in cases

involving threats to public health or safety, such as pollution.

More recently, governments have brought them in lawsuits against

companies that sold or marketed tobacco and opioids.

In the New Mexico case, the judge found that the harms from

Meta's platforms extended beyond individual users and imposed

broader costs on families, schools, hospitals and law

enforcement.

Meta argued at trial that it had not violated any public

right such as access to air or water, that its social media

platforms are not the only ones used by the state's young

residents and that the case ignored the impact of other apps.

HOW DOES THIS AFFECT OTHER CASES?

The New Mexico case does not directly impact thousands of

other pending lawsuits by children and families or public

nuisance claims by more than 40 states and 1,300 school

districts.

But New Mexico Attorney General Raúl Torrez has called the

decision a "blueprint" for governments seeking to force changes

on social media platforms through the courts.

A federal trial scheduled for August 12 in Oakland,

California, will test claims by 29 states that Meta illegally

collected and used children's data, designed Facebook and

Instagram to addict young users and misled consumers. The case

could expose Meta to massive damages and potentially sweeping

changes to its products.

Meta has denied allegations that it harmed young users or

misled the public about the safety of its platforms. The company

has pointed to investments in youth-safety tools and said it has

worked to identify and remove harmful content.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Toyota considers investing in potential $42 billion buyout of key supplier
Toyota considers investing in potential $42 billion buyout of key supplier
May 25, 2025
By Maki Shiraki and Makiko Yamazaki TOKYO, April 27 (Reuters) - Toyota Motor ( TM ) said it is exploring the possibility of investing in a potential buyout of key parts supplier Toyota Industries ( TYIDF ) - a buyout that reportedly could cost $42 billion. We are currently exploring various possibilities, including partial investment, the automaker said in a...
Toyota considers investing in potential $42 billion buyout of key supplier
Toyota considers investing in potential $42 billion buyout of key supplier
May 25, 2025
By Maki Shiraki and Makiko Yamazaki TOKYO (Reuters) -Toyota Motor ( TM ) said it is exploring the possibility of investing in a potential buyout of key parts supplier Toyota Industries ( TYIDF ) - a buyout that reportedly could cost $42 billion. We are currently exploring various possibilities, including partial investment, the automaker said in a filing with the...
Google agrees $36 million fine for anti-competitive deals with Australia telcos
Google agrees $36 million fine for anti-competitive deals with Australia telcos
Aug 17, 2025
SYDNEY, Aug 18 (Reuters) - Google agreed on Monday to pay a A$55 million ($35.8 million) fine in Australia after the consumer watchdog found it had hurt competition by paying the country's two largest telcos to pre-install its search application on Android phones, excluding rival search engines. The fine extends a bumpy period for the Alphabet-owned internet giant in Australia,...
Japan is a test case for Trump's tariff deals. But talks may be tortuous
Japan is a test case for Trump's tariff deals. But talks may be tortuous
May 25, 2025
TOKYO/WASHINGTON (Reuters) -When Tokyo's top trade negotiator met U.S. President Donald Trump for tariff talks at the White House earlier this month, he presented him with a gold-coloured piggy bank.     One detail, seemingly unnoticed by those in the room, is that the gift was made in China, the focal point for Trump's sweeping trade war that has engulfed Japan...
Copyright 2023-2026 - www.financetom.com All Rights Reserved