Meta ordered to pay $942 million as child safety verdicts mount

A New Mexico judge ordered Meta to pay $942 million and overhaul platform safety, the first state to win a child-safety trial against the company.

A New Mexico judge ordered Meta Platforms to pay $942 million and restrict how minors use Facebook and Instagram, the first state to win a child-safety trial against a major social media company. Judge Bryan Biedscheid on Thursday ordered the company to create a $567 million abatement fund on top of $375 million in civil penalties a jury assessed in March, after finding Meta willfully violated the state's Unfair Trade Practices Act on 37,500 counts.

"Today's decision is a victory for every parent who has worried about what social media is doing to their child," Raúl Torrez, New Mexico's attorney general, said in a statement. "Now other states, and other countries confronting the same crisis, have a roadmap they can follow."

Of the abatement fund, $420 million is earmarked for youth treatment services, with the remainder directed to prevention, awareness and screening over five years. The judge also ordered Meta to hide "like" counts by default for underage users, limit minors in the state to 90 hours per month across both platforms, and turn off most push notifications overnight and during school hours. State attorneys had sought $779.5 million for the abatement fund; the judge ordered $567 million.

The ruling is the first of many legal fronts for Meta, which faces lawsuits from more than 40 states, thousands of families and school districts. A trial in Tennessee is underway, and jury selection begins next week in Oakland, California, where four state attorneys general seek more than $1 trillion in damages. Meta reported $2.4 billion in legal costs in the second quarter alone.

The court's age-verification requirements reflect the constraints of federal law. Judge Biedscheid noted that the Children's Online Privacy Protection Act prevents Meta from applying verification tools that require children under 13 to submit personal data or be passively tracked. He also said ordering age verification only for Meta — and not other social media companies — would be "inequitable and unduly injurious" to the company.

Instead, Meta must improve its AI-based age estimation tools in New Mexico, which analyze signals such as friend networks and content consumption patterns. The company must request proof of age for users it estimates to be under 13, treat uncertain users as minors until verified, and purge personal information collected from users younger than 13. A reporting portal for school employees to flag suspected underage accounts must be established with schools or a child safety organization.

Legal exposure compounds across 40-plus state suits

Meta said it disagrees 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," a company spokesperson said. "We remain confident in our record of protecting teens online."

The $942 million judgment represents a fraction of Meta's projected $60 billion annual profit for 2025, and investors largely shrugged off the ruling — shares fell less than half a percent to $589.44 in after-hours trading. But the cumulative legal exposure is substantial. The Oakland trial, brought by four states, seeks more than $1 trillion in damages. A Los Angeles jury earlier this year found Meta and YouTube liable in a case brought by a young woman who said excessive use of the products led to mental health problems.

The New Mexico case originated from an undercover investigation in which state agents created a fictitious profile impersonating a 13-year-old girl. The March jury verdict assessed the maximum $5,000 penalty per violation across 37,500 counts.

Laura Edelson, an assistant professor at Northeastern University focusing on social media and cybersecurity, said the ruling could reshape how states approach platform regulation. "America is not going to pass a law that bans social media," Edelson said. "But if companies like Meta know they're causing harm to users by product design, the states are finally finding a way to rein this in."

The ruling requires Meta to submit compliance updates to the court twice a year and to create on-platform screens that explain its safety tools and protective features.

This article is for informational purposes only and does not constitute investment advice.