In a groundbreaking legal decision, a jury in New Mexico has ruled against Meta, accusing the tech giant of knowingly endangering children’s mental health and obscuring the realities of child sexual exploitation on its platforms. This verdict is seen as a sign of an evolving approach towards holding tech companies accountable and reflects an increased willingness by authorities to take action.

This pivotal ruling follows an extensive trial lasting nearly seven weeks. Meanwhile, in a separate but related case, a federal jury in California continues deliberations on whether Meta and YouTube should also face liability. The New Mexico case saw jurors aligning with state prosecutors, who argued that Meta—parent company of Instagram, Facebook, and WhatsApp—opted for profit over user safety, thereby breaching the state’s Unfair Practices Act.

The jury concurred with charges that Meta issued false or misleading statements and engaged in “unconscionable” business practices that exploited the vulnerabilities of young users. Their decision highlighted thousands of violations, each contributing to a cumulative penalty of $375 million. This figure, while substantial, is significantly less than the amount initially sought by prosecutors.

Despite this legal setback, Meta, which boasts a valuation of approximately $1.5 trillion, saw its stock rise by 5% in early after-hours trading, indicating that shareholders were largely unfazed by the verdict.

How much Meta owes

Jurors found there were thousands of violations, each counting separately toward a penalty of $375 million. That’s less than one-fifth of what prosecutors were seeking.

Meta is valued at about $1.5 trillion and the company’s stock was up 5% in early after-hours trading following the verdict, a signal that shareholders were shrugging off the news.

Juror Linda Payton, 38, said the jury reached a compromise on the estimated number of teenagers affected by Meta’s platforms, while opting for the maximum penalty per violation. With a maximum $5,000 penalty for each violation, she said she thought each child was worth the maximum amount.

What will change on Meta’s platforms

The social media conglomerate won’t be forced to change its practices right away. It will be up to a judge – not a jury – to determine whether Meta’s social media platforms created a public nuisance and whether the company should pay for public programs to address the harms. That second phase of the trial will happen in May.

A Meta spokesperson said the company disagrees with the verdict and will appeal.

“We work hard to keep people safe on our platforms and are clear about the challenges of identifying and removing bad actors or harmful content,” the spokesperson said. “We will continue to defend ourselves vigorously, and we remain confident in our record of protecting teens online.”

Attorneys for Meta said the company discloses risks and makes efforts to weed out harmful content and experiences, while acknowledging that some bad material gets through its safety net.

Other lawsuits against Meta

New Mexico’s case was among the first to reach trial in a wave of litigation involving social media platforms and their impacts on children.

More than 40 state attorneys general have filed lawsuits against Meta, claiming it’s contributing to a mental health crisis among young people by deliberately designing Instagram and Facebook features that are addictive.

“Meta’s house of cards is beginning to fall,” said Sacha Haworth, executive director of watchdog group The Tech Oversight Project. “For years, it’s been glaringly obvious that Meta has failed to stop sexual predators from turning online interactions into real world harm.”

Haworth pointed to whistleblowers like Arturo Béjar, as well as unsealed documents and other evidence, saying it painted a damning picture.

New Mexico’s case relied on an undercover investigation where agents created social media accounts posing as children to document sexual solicitations and Meta’s response.

The lawsuit, filed in 2023 by New Mexico Attorney General Raúl Torrez, also said Meta hasn’t fully disclosed or addressed the dangers of social media addiction. Meta hasn’t agreed that social media addiction exists, but executives at trial acknowledged “problematic use” and say they want people to feel good about the time they spend on Meta’s platforms.

“Evidence shows not only that Meta invests in safety because it’s the right thing to do but because it is good for business,” Meta attorney Kevin Huff told jurors in closing arguments. “Meta designs its apps to help people connect with friends and family, not to try to connect predators.”

Tech companies have been protected from liability for content posted on their social media platforms under Section 230, a 30-year-old provision of the U.S. Communications Decency Act, as well as a First Amendment shield.

New Mexico prosecutors say Meta still should be responsible for its role in pushing out that content through complex algorithms that proliferate material that is harmful for children.

“We know the output is meant to be engagement and time spent for kids,” prosecution attorney Linda Singer said. “That choice that Meta made has profound negative impacts on kids.”

What the New Mexico jury reviewed

The New Mexico trial examined a raft of Meta’s internal correspondence and reports related to child safety. Jurors also heard testimony from Meta executives, platform engineers, whistleblowers who left the company, psychiatric experts and tech safety consultants.

The jury also heard testimony from local public school educators who struggled with disruptions linked to social media, including sextortion schemes targeting children.

In reaching a verdict, the jury considered whether social media users were misled by specific statements about platform safety by Meta CEO Mark Zuckerberg, Instagram head Adam Mosseri and Meta global head of safety Antigone Davis.

They also considered Meta’s failure to enforce its ban on users under 13, the role of its algorithms in prioritizing sensational or harmful content, and the prevalence of social media content about teen suicide.

ParentsSOS, a coalition of families who have lost children to harm caused by social media, called the verdict a “watershed moment.”

“We parents who have experienced the unimaginable – the death of a child because of social media harms – applaud this rare and momentous milestone in the years-long fight to hold Big Tech accountable for the dangers their products pose to our kids,” the group said in a statement.

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Associated Press writer Barbara Ortutay in San Francisco contributed to this report.