New Mexico Court Orders Meta to Pay $567 Million Over Teen Mental Health
A New Mexico state court has ordered Meta to pay $567 million into a fund supporting teen mental health and to introduce sweeping changes to how Facebook and Instagram operate for young users. The decision follows a ruling that the company created a public nuisance by harming children’s wellbeing through the design and operation of its social media platforms.
Judge Bryan Biedscheid in Santa Fe ruled in favour of New Mexico Attorney General Raúl Torrez, who argued that Meta deliberately designed its platforms to encourage excessive use among teenagers while failing to adequately protect children from sexual exploitation.
The latest decision comes five months after a New Mexico jury ordered Meta to pay $375 million after finding the company violated consumer protection laws by misrepresenting the safety of Facebook and Instagram for young users.
Court Orders Major Youth Safety Reforms
Judge Biedscheid directed Meta to introduce a range of youth safety measures that will remain in effect for five years.
The court ordered monthly limits on teenagers’ use of Facebook and Instagram. In addition, Meta must restrict notifications sent to young users, strengthen controls limiting contact between adults and minors, introduce safeguards for its AI chatbots and improve the handling of reports involving child sexual abuse.
Meta said it intends to appeal the ruling. The company also stated that it continues to identify and remove harmful content from its platforms.
In a statement, Meta said it remains confident in its efforts to protect teenagers online and will continue defending itself against claims that it believes misrepresent the facts.
Attorney General Torrez welcomed the decision, saying Meta prioritised profits over children’s safety. He described the ruling as the first to require a major social media company to make significant operational changes aimed at protecting young users.
Torrez also said the judgment could provide a model for other states and countries facing similar concerns.
AI Chatbots Included in Court Restrictions
The ruling also addresses Meta’s artificial intelligence chatbots.
Judge Biedscheid ordered the company to prevent children in New Mexico from engaging in romantic or sexualised conversations with Meta’s AI chatbots. Furthermore, adults in the state must not be able to use the chatbots to simulate or discuss sexualised interactions involving children.
The decision follows previous Reuters reporting on internal company documents that indicated Meta’s AI chatbots could engage children in romantic or sensual conversations. Those reports formed part of a broader series examining the company’s moderation practices and business operations.
Public Nuisance Finding Marks Significant Legal Development
The judge reached his decision after hearing three weeks of testimony during a non-jury trial focused solely on whether Meta’s platforms constituted a public nuisance under New Mexico law.
Public nuisance claims have traditionally involved conduct affecting public health or safety, such as pollution or blocked public roads. However, governments have increasingly relied on the legal doctrine in cases involving tobacco, opioids, climate change, vaping and artificial intelligence.
In his ruling, Biedscheid compared the effects of Meta’s platforms to pollution spreading beyond its original source. He wrote that the harm extends beyond the platforms themselves and creates wider societal burdens affecting children, families, schools, hospitals and law enforcement.
Meta argued that it could not be held liable for creating a public nuisance because it had not interfered with a recognised public right such as access to clean air or water. The company also maintained that young people use many social media services and that the lawsuit unfairly singled out its platforms.
In addition, Meta argued that many of the proposed changes were either technologically impractical or impossible to implement. It also warned that some measures could force the company to cease operating in New Mexico.
The company further contended that New Mexico’s claims were barred by Section 230 of the Communications Decency Act, which generally protects online platforms from liability for user-generated content.
Judge Biedscheid rejected that defence, finding the lawsuit challenged Meta’s platform design and features rather than seeking to hold the company liable for third-party content.
However, the judge declined to impose some of the state’s requested remedies. He concluded that changes involving Meta’s algorithms and features such as infinite scroll and autoplay could raise concerns under the First Amendment, affect the company’s competitive position and conflict with Section 230 protections.
Further Legal Challenges Await Meta
The ruling comes as Meta prepares to face another trial in federal court in Oakland, California, where 29 states allege the company designed Facebook and Instagram to addict children while misleading users about platform safety. The case could expose Meta to substantial financial damages.
The company is also defending a separate lawsuit brought by Tennessee, where trial proceedings began in July.
Meta has previously warned investors that legal and regulatory action in the United States and the European Union relating to youth social media issues could significantly affect its business and financial performance.
With inputs from Reuters