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

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

In the second phase of trial, the state will argue for changes to Meta’s business.

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New Mexico Attorney General Raúl Torrez won a historic sum of $375 million in a landmark child safety case against Meta earlier this year. But the next stage of the fight could be even more consequential for Meta and the social media industry at large.

Beginning Monday, attorneys for Meta and New Mexico will return to a Santa Fe courthouse for a three-week public nuisance trial, where they’ll argue over the changes the AG wants the judge to order Meta make to Facebook, Instagram, and Whats App. Those changes include adding age verification for New Mexico users, prohibiting end-to-end encryption for users under 18 and capping their use to 90 hours per month, limiting engagement-boosting features like infinite scroll and autoplay, and requiring Meta to detect 99 percent of new child sexual abuse material (CSAM).

“From the outset, our goal was to try and change the way the company’s doing business,” Torrez told The Verge on a recent visit to Washington, DC, to advocate for new kids safety legislation. “I recognize that even at $375 million for a company this big and this profitable, it’s not enough in and of itself to change the way they’re doing business. In fact, there’s probably some folks in that company who think of it as the cost of doing business.”

“Even at $375 million for a company this big and this profitable, it’s not enough in and of itself to change the way they’re doing business”

While any changes ordered by the judge would only apply to Meta and its operations in New Mexico, the company could apply the changes in other states for the sake of simplicity. Or, as it’s threatened to do, it could simply go dark in the state. A court order could send a message to other tech companies that courts may be willing to alter their businesses if they’re found liable.

Meta misled users about its products’ safety, jury decides

During the trial, New Mexico will argue Meta has become a public nuisance by creating a public health hazard in the state. The AG’s office expects to call on about 15 witnesses, including experts who will testify to the feasibility of their proposed remedies, and fact witnesses who will testify about Meta’s alleged harms. After Meta makes its defense, Judge Bryan Biedscheid will evaluate which proposals are relevant and feasible — a process that could take some time, compared to the speedy turnaround of the jury verdict in March.

A sweeping win for New Mexico could energize Torrez and thousands of other plaintiffs currently pursuing cases against tech companies. Conversely, a limited order could be a significant blow. The outcome won’t directly impact other cases, but it will almost certainly color negotiations over potential settlements.

Several of Torrez’s requests are hot-button tech policy issues. Age verification would almost certainly require Meta or a third-party provider to collect more personal information on adults and minors alike, which privacy advocates have consistently warned can make users less safe. Don Mc Gowan, who previously served on the board of the National Center for Missing and Exploited Children (NCMEC), said that barring encrypted communications on platforms like Facebook “is a great way to make sure that nobody uses Facebook Messenger anymore and just moves their activity to other platforms that aren’t touched by this lawsuit.”

The mandate may do little to change the reality of certain parts of the business — Meta recently announced it was getting rid of end-to-end encrypted messaging on Instagram that it said “very few people” actually used.

Peter Chapman, associate director of the Knight-Georgetown Institute, which works to connect policymakers and others with independent tech policy research, said there could be “significant tradeoffs” to a prohibition on encryption, and other changes may be more effective. For example, evidence presented by the state showed that Meta’s own profile recommendations were connecting adults and minors, a feature that poses a clearer danger of harm without much benefit, and which Torrez is also asking the court to stop. “There’s an opportunity to intervene at that level and try to prevent more of these harmful interactions from taking place without having to tackle encryption,” said Chapman.

No single feature change is likely to solve the entire child and teen safety problem, said Chapman, which is why it’s notable that Torrez plans to ask for several layers of changes. Still, the overall effectiveness of any given remedy will also depend on how it’s implemented and monitored. For instance, what would be the methodology Meta uses to report a 99 percent detection rate of new CSAM? How does it count or surmise what it hasn’t caught? The same goes for the accuracy and reliability of any mandated age verification.

Meta points to this potential issue in its argument against Torrez’s proposed remedies. “Regardless of where the accuracy threshold is set, Meta would never be able to prove that the system met that standard, because doing the calculation would require that Meta detect 100% of CSAM to use as the denominator,” the company wrote in a legal filing. Torrez’s chief deputy, James Grayson, said on a press call that the court and an appointed independent monitor would have some discretion over tracking; the office hasn’t yet identified who this monitor would be.

“The demands that are being made in New Mexico are ill-informed and provide massive additional exposure for other kinds of exploitation”

Meta and other groups that oppose the AG’s approach say the outcomes he’s seeking are counterproductive. “The demands that are being made in New Mexico are ill-informed and provide massive additional exposure for other kinds of exploitation,” said Maureen Flatley, president of Stop Child Predators, a group that advocates for more funding for enforcement of criminal laws against child predators, and has received funding from Meta-backed trade group Net Choice. “This notion that the platforms have to be responsible for pushing all these people out would be like saying to the US Bankers Association, ‘By the way, you are responsible for all the bank robberies from now on,’ which is ludicrous.”

“The New Mexico Attorney General’s focus on a single platform is a misguided strategy that ignores the hundreds of other apps teens use daily,” Meta spokesperson Chris Sgro said in a statement. “The state’s proposed mandates infringe on parental rights and stifle free expression for all New Mexicans. Regardless, we remain committed to providing safe, age-appropriate experiences and have already launched many of the protections the state seeks, including 13 safety measures this past year.”

But Torrez has taken aim at the broader tech industry, too. He recently visited Washington, DC, to advocate for new protections for kids online and an overhaul of Section 230, the law that protects tech platforms from being held liable for their users’ posts. “While we were able to prevail in our district court in Santa Fe, I still think the law as it currently exists creates a lot of ambiguity,” he told The Verge on that visit. “If Section 230 were not something that these companies could hide behind, then it increases the chances that they’re going to have to actually make their case to a jury.”

But Chapman said regulation through lawsuits isn’t an “uncommon sort of story” in the US. “Whether that’s tobacco, opioids, e-cigarettes, there is precedent for legal action moving a broader policy conversation.”

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