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

New Mexico Attorney General Raúl Torrez secured a significant victory against Meta earlier this year, winning a historic $375 million in a landmark child safety case. However, this initial financial penalty might be just the beginning. The battle is now entering its second, potentially far more consequential, phase. Starting this Monday, Meta and New Mexico attorneys will return to a Santa Fe courthouse for a three-week public nuisance trial, where the state aims to compel fundamental changes to how Meta operates its platforms, including Facebook, Instagram, and WhatsApp. The proposed changes by the Attorney General are extensive and target core aspects of Meta's business model. These include mandating age verification for all New Mexico users, prohibiting end-to-end encryption for users under 18, capping their monthly usage at 90 hours, and limiting engagement-boosting features such as infinite scroll and autoplay. Furthermore, the state demands that Meta achieve a 99 percent detection rate for new child sexual abuse material (CSAM). Torrez explicitly stated to The Verge that the initial $375 million fine, while substantial, is “not enough in and of itself to change the way they’re doing business,” suggesting that for a company of Meta’s size, it might simply be viewed as a cost of doing business. While any court-ordered changes would initially apply only to Meta’s operations within New Mexico, the implications could resonate much wider. Meta might choose to implement these changes across all states for operational simplicity, or, as it has previously threatened, it could opt to cease operations in New Mexico entirely. A decisive court order could also set a powerful precedent, signaling to other tech giants that courts are prepared to mandate alterations to their business practices if they are found liable for public harm. New Mexico plans to present its case by arguing that Meta has become a public nuisance, creating a significant public health hazard, and expects to call approximately 15 witnesses, including experts and fact witnesses. The proposed remedies, however, are not without their complexities and potential drawbacks. Age verification, for instance, would necessitate the collection of more personal data from both adults and minors, raising significant privacy concerns that advocates warn could make users less safe. Similarly, a ban on encrypted communications for minors could inadvertently push them to alternative platforms not subject to such regulations, as noted by Don McGowan, formerly of the National Center for Missing and Exploited Children (NCMEC). Peter Chapman of the Knight-Georgetown Institute highlights “significant tradeoffs” with an encryption prohibition, suggesting that other interventions might be more effective, such as stopping Meta’s own profile recommendations that connect adults and minors – a feature posing clear harm without much benefit. The practical implementation and monitoring of these sweeping changes also present considerable challenges. For example, the methodology for Meta to prove a 99 percent detection rate for new CSAM, especially when accounting for what it hasn’t caught, remains a complex issue. Meta itself has argued in legal filings that proving such a standard is practically impossible, as it would require detecting 100% of CSAM to establish the denominator. While the court and an appointed independent monitor would have discretion over tracking, the details of this oversight are yet to be finalized. The outcome of this trial, whether a sweeping win or a limited order, will undoubtedly influence the ongoing negotiations and thousands of other lawsuits currently being pursued against tech companies over addiction, safety, and mental health.