Observed Signal · Mar 24, 2026 · Court Verdict · Source: CNBC Technology · Impact: 4/5 · Sentiment: Negative
Jury Orders Meta to Pay $375M in New Mexico Case
A New Mexico state court jury found Meta liable for willfully violating the state's unfair practices act and awarded $375 million in civil damages after a trial alleging Facebook and Instagram failed to protect minors from child predators. The suit, brought by New Mexico Attorney General Raúl Torrez in 2023 following an undercover operation using a fake 13-year-old profile, accused Meta of misleading users about safety and ignoring internal warnings. Meta said it will appeal. A second, bench-phase of the trial begins May 4 to determine whether Meta created a public nuisance and whether it must fund remedial public programs or implement changes such as age verification and predator removal. The case is part of broader litigation targeting social platforms and design features linked to youth harms.
A jury verdict against a major social platform creates legal precedent and regulatory pressure that could prompt design, moderation, and compliance changes across social media companies; it also signals increased litigation risk related to platform design and child safety.
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Key Takeaways & Evidence Grounding
- A New Mexico jury found Meta willfully violated the state's unfair practices act.
- The jury awarded $375 million in civil damages to the state of New Mexico.
- Raúl Torrez, New Mexico Attorney General, sued Meta in 2023 after an undercover operation involving a fake 13-year-old profile.
- A judge will hold a second, non-jury phase beginning May 4 to consider public-nuisance findings and potential remedies.
- Meta intends to appeal the verdict and denies the allegations.
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Meta Loses First US Trial Over Youth Safety
A U.S. jury in Santa Fe found Meta — the parent company of Facebook and Instagram — violated two New Mexico consumer protection laws and awarded $375 million in penalties, concluding the company did not do enough to protect young users. The suit was filed in 2023 by New Mexico Attorney General Raúl Torrez, who alleged Meta prioritized profits over safety and concealed risks to children and parents. Meta said it will appeal. A judge, not the jury, will decide in a second phase (scheduled for May) whether Meta’s platforms constitute a public nuisance and whether the company must fund public programs to address harms. More than 40 state attorneys general have filed similar lawsuits against Meta and other platforms.
Jury Orders Meta to Pay $375M Over Child Safety
A Santa Fe jury ordered Meta to pay $375 million in civil penalties after finding the company misled consumers about platform safety and endangered children. The verdict, reached after a six-week trial, found Meta liable under New Mexico’s Unfair Practices Act and applied the law’s $5,000-per-violation maximum. Evidence included a 2023 undercover operation using decoy Facebook and Instagram accounts, internal Meta documents, and testimony from former employees who said safety concerns were ignored. High-profile testimony and a deposition of CEO Mark Zuckerberg were presented at trial. Meta said it will appeal. A bench trial on public nuisance claims is scheduled to begin May 4 and could produce additional penalties or court-ordered platform changes such as age verification and new protections for minors.
New Mexico Seeks Platform Changes After Meta Verdict
OpenAI has discontinued its AI-generated video app Sora after months of rapid early growth and escalating challenges. Sora—first shown in late 2024 and later released as a standalone mobile app—quickly climbed the US App Store, recording about 627,000 iOS downloads in its first week (Appfigures) and, per related reporting, reached roughly 1 million downloads within five days. The app offered features such as a “Cameo” self-insertion tool and a planned deeper integration with ChatGPT. OpenAI cited heightened competition and a strategic refocus toward business customers as reasons for the shutdown; the app also faced controversies over deepfakes and copyright. A planned Disney collaboration and roughly $1 billion investment tied to using iconic characters is now void. Related reporting notes OpenAI will publish timelines to preserve user work and signaled broader corporate reprioritization.
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