Meta's court defeat could exceed $375 million costs

New Mexico Attorney General Raúl Torrez winned a groundbreaking $375 million in an important case concerning child safety against Meta earlier this year.

Yet, the forthcoming stage of the battle could bear even more weight for Meta and the wider social media industry.

Starting Monday, legal teams for Meta and New Mexico will resume their arguments in a Santa Fe courthouse over a three-week public nuisance trial, where the debate will center on the modifications the AG is demanding the judge enforce for Facebook, Instagram, and WhatsApp.

These proposed changes involve implementing age verification for users in New Mexico, banning end-to-end encryption for minors, restricting them to 90 usage hours monthly, minimising features like autoplay and infinite scroll, and compelling Meta to identify 99% of novel child sexual abuse material (CSAM).

If the judge mandates changes, they will only be relevant to Meta's operations in New Mexico, though the company might extend them to other states for ease of compliance.

Alternatively, as they have suggested, Meta might choose to withdraw its presence in the state.

A definitive court mandate may signal to other tech giants that the judiciary might impose alterations on their business models if found liable.

Throughout the trial, New Mexico will assert that Meta has evolved into a public threat by posing a health risk within the state.

The Attorney General’s office plans to present around 15 witnesses, including experts to testify on the practicality of their proposed measures and factual witnesses to discuss the alleged harm caused by Meta.

Following Meta's defense, Judge Bryan Biedscheid will assess which recommendations are pertinent and viable — a process potentially more prolonged than the swift outcome of the jury's decision in March.

A decisive victory for New Mexico might inspire Torrez and many other plaintiffs with ongoing lawsuits against tech firms.

On the other hand, a more restrained court order could prove to be a heavy setback. While the outcome won't directly affect other litigation efforts, it will likely shape settlement discussions.

A number of Torrez’s proposals highlight contentious tech policy discussions. Age verification could necessitate Meta or an external provider collecting additional personal data from both adults and minors, raising concerns from privacy advocates who argue it may heighten user vulnerability.

Don McGowan, formerly on the National Center for Missing and Exploited Children (NCMEC) board, remarked that prohibiting encryption on platforms such as Facebook "could deter users from Messenger entirely, driving their activity to services unaffected by this lawsuit."

The requirement might have limited impact on parts of Meta’s business, as the company recently announced they were eliminating end-to-end encryption on Instagram, claiming it had minimal usage.