Meta’s historic loss in court could cost more than $375 million

Mexico’s Attorney General Raúl Torrez won a landmark $375 million settlement in a landmark child safety case against Meta earlier this year. But the next phase of the fight could have a big impact on Meta and the social media industry at large.
Starting Monday, lawyers for Meta and New Mexico will return to a Santa Fe court for a three-week public hearing, where they will argue over changes the AG wants a judge to order Meta to Facebook, Instagram, and WhatsApp. Those changes include adding age verification for users in New Mexico, prohibiting end-to-end encryption for users under 18 and limiting their usage to 90 hours per month, limiting features that encourage engagement such as infinite scrolling and autoplay, and requiring Meta to detect 99 percent of new sexually offensive material (CSAM).
“From the beginning, our goal was to try to change the way the company does business,” Torrez said. The Verge on a recent visit to Washington, DC, to advocate for new child safety laws. “I realize that even $375 million in a company this large and profitable, is not enough by itself to change the way it does business. In fact, there are probably some people in that company who think it’s the cost of doing business.”
“Even $375 million in a company this big and profitable, it’s not enough by itself to change the way it does business”
Although any changes ordered by the judge will only apply to Meta and its operations in New Mexico, the company could implement changes in other states for convenience. Or, as it is threatened to do, it may turn out to be dark in the situation. The court order could send a message to other tech companies that courts may be willing to change their businesses if they are found liable.
During the trial, New Mexico will argue that Meta is a public nuisance by creating a public health hazard in the state. The AG’s office expects to call about 15 witnesses, including experts who will testify about the feasibility of the proposed remedies, and actual witnesses who will testify about Meta’s alleged injuries. After Meta defends itself, Judge Bryan Biedscheid will evaluate which proposals are appropriate and feasible – a process that can take time, compared to the quick reversal of the jury’s decision in March.
New Mexico’s stunning win could energize Torrez and the thousands of other plaintiffs currently pursuing lawsuits against tech companies. On the other hand, limited organization can be a significant contribution. The outcome will not directly affect other cases, but it will likely color discussions about possible agreements.
Many of Torrez’s claims are hot-button technology policy issues. Age verification would likely require Meta or a third-party provider to collect more personal information from adults and children alike, which privacy advocates regularly warn could make users less safe. Don McGowan, who previously served on the board of the National Center for Missing and Exploited Children (NCMEC), said that banning encrypted communications on platforms like Facebook is “a good way to make sure that no one uses Facebook Messenger anymore and just moves their work to other platforms that are not affected by this case.”
The mandate may do little to change the reality of some parts of the business – Meta recently announced that it is removing end-to-end encrypted messages on Instagram that “very few people” actually use.
Peter Chapman, associate director of the Knight-Georgetown Institute, which works to connect policymakers and others with private technology policy research, said there could be “huge trade-offs” in banning encryption, and other reforms would be more effective. For example, the evidence presented by the state showed that the recommendations of the Meta profile itself were connecting adults and children, a feature that poses a clear risk of harm without much benefit, and Torrez also asked the court to stop. “There is an opportunity to intervene at that level and try to prevent many of these dangerous interactions from occurring without addressing encryption,” Chapman said.
No single regulatory change can solve every child and youth safety problem, Chapman said, which is why it’s noteworthy that Torrez plans to call for several changes. However, the overall effectiveness of any given remedy will also depend on how it is used and monitored. For example, what would be the method used by Meta to report a 99 percent detection rate for a new CSAM? How does he count or estimate before he catches it? The same goes for the accuracy and reliability of any authorized age verification.
Meta points to this potential problem in its argument against Torrez’s proposed remedies. “Regardless of where the accuracy limit is set, Meta will never be able to prove that the system met that standard, because doing the calculation would require Meta to get 100% of CSAM to use as the denominator,” the company wrote in an official filing. Torrez’s chief deputy, James Grayson, said in a press conference that the court and the appointed independent guardian will have discretion over the trail; the office has not yet identified who this monitor will be.
“The demands made in New Mexico are uninformed and provide additional exposure to other forms of exploitation”
Meta and other groups opposed to the AG’s approach say the results they are seeking are ineffective. “The demands made in New Mexico are uninformed and provide more exposure to other forms of exploitation,” said Maureen Flatley, president of Stop Child Predators, a group that advocates for more criminal laws against child victims, and has received funding from the Meta-backed trade group iNetChoice. “This idea that the platforms should be responsible for firing all these people would be like saying to the US Bankers Association, ‘Besides, you’re responsible for all bank robberies from now on,’ which is ridiculous.”
“The New Mexico Attorney General’s focus on one platform is a misguided strategy that ignores the hundreds of other apps that youth use every day,” Meta spokesman Chris Sgro said in a statement. “The government’s proposed mandate violates parents’ rights and restricts freedom of expression for all Mexicans. Regardless, we remain committed to providing safe, age-appropriate information and have already introduced many of the protections the state requires, including 13 safety measures this past year.”
But Torrez is aiming for the broader tech industry, too. He recently visited Washington, DC, to advocate for new online child protections and an overhaul of Section 230, a law that protects technology platforms from being held liable for their users’ posts. “Although we were able to succeed in the Santa Fe district court, I still think that the law as it currently exists creates a lot of confusion,” he said. The Verge on that visit. “If Section 230 was not something that these companies could hide behind, that means that it increases the chances of them submitting their case to the judges.”
But Chapman said litigation is not an “unusual type of issue” in the US. “Whether it’s tobacco, opioids, cigarettes, there is precedent for legislative action that moves the broader policy conversation.”



