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Meta Trial in New Mexico: Closing Arguments Conclude

Meta, the social media conglomerate behind Instagram, Facebook, and WhatsApp, is facing a landmark trial in New Mexico state court, accused of misleading users about the safety of its platforms for children. The trial, which began six weeks ago, has heard testimony from numerous witnesses, including local teachers, psychiatric experts, and top Meta officials.

The Case

Prosecutors have accused Meta of prioritizing profits over safety in violation of state consumer protection laws. They have raised concerns about the safety of complex algorithms, messaging features, and settings, which they claim have led to sensational and harmful content being recommended to teenagers. The prosecution has also highlighted the company's failure to enforce its minimum user age of 13.

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Penalty

Prosecutors are seeking a civil penalty of more than $2 billion against Meta, based on the maximum $5,000 penalty per violation on two counts of consumer protection violations, and an estimated 208,700 monthly users of Meta platforms under the age of 18 in New Mexico.

Defenses

Meta's attorneys dispute the claims, stating that the company incorporates protections for teenagers and weeds out harmful content. However, they acknowledge that some potentially harmful posts may get past its safety nets.

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Next Phase

A second phase of the trial will follow, with a judge deciding whether Meta created a public nuisance and should be financially liable for alleged harms to children. Attorney General Raúl Torrez filed suit in 2023, accusing Meta of creating a marketplace and "breeding ground" for predators who target children for sexual exploitation.

Section 230 and Liability

Prosecutors are aware that tech companies have been protected from liability for material posted on their social media platforms under Section 230 of the U.S. Communications Decency Act, as well as a First Amendment shield. However, they argue that New Mexico is not seeking to hold Meta accountable for content on its platforms, but rather its role in pushing out that content through complex algorithms that proliferate material that can be addictive and harmful to children.

Investor Takeaway

Investors should be cautious of potential regulatory risks and reputational damage to Meta.

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