Meta Platforms (META) is in court in Santa Fe, New Mexico, over a child-safety case that could result in a fine of up to $3.7 billion and reshape how its app operates. The court will decide whether the tech giant will be labeled a public nuisance. If this yes, the company will be forced to make major changes to how some of its products, including Facebook and Instagram, operate.
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Meta Faces $3.7 Billion Risk After Jury Ruling
The New Mexico Attorney General, Raul Torrez, filed a case against Meta Platforms in March 2026. He accused Meta of failing to protect children who use its platforms and misleading the public about the risks tied to them.
However, Meta challenged the allegations in court, but the jury ruled that the tech giant willfully violated the state’s unfair practices law. The company was then ordered to pay $375 million based on the number of offenses.
The case is now in the second phase, a bench trial which will run for about three weeks. This will determine whether Meta’s actions actually caused wider public harm.
Meta said that the state is now seeking nearly $3.7 billion in damages, along with a court order that may force major changes. The changes will include stronger age checks and safer recommendation systems that could change how the firm operates in the state.
At the same time, officials want to monitor the firm’s activities to ensure it has complied with the rules. However, Meta said the demands are unrealistic with plans to shut down access to its platforms in the Country, if an agreement is not reached.
Case Could Set Tone for Future Lawsuits
Legal experts claim that the verdict of Meta’s case will determine how courts will handle issues related to social media firms. This is based on past issues with tobacco firms that led to large payouts and reduced industry power over time.
Alongside this case, Meta Platforms is facing pressure from other bodies. For instance, the firm is responsible for 70% of the $6 million in damages in a joint case with YouTube. Both companies have been sued by a woman known as K.G.M, who claimed to be addicted to their apps.
At the same time, a larger federal case involving Meta, YouTube, TikTok, and Snap will begin on June 15. Notably, many school districts have claimed that the apps are harmful to young users.
Therefore, the New Mexico case could act as a “first test” for the upcoming trials. This is because most social media platforms are now being treated as defective systems, rather than content hosts.
On the flip side, social media companies are also protected by Section 230 of the Communications Decency Act. The section states that companies like Meta are not responsible for what users post. However, the plaintiffs argue that the issue is not about the contents but about how the entire system is designed.
Is Meta Stock Good to Buy Now?
Wall Street analysts rate Meta Platforms (META) a Strong Buy, based on TipRanks comparison data. The stock currently trades around $688 and has an average price target of $823.92, with 36.05% upside potential. For more information on the performance, rating, and price target of this stock, visit the TipRanks Stocks Comparison Center.
