A court in the US state of New Mexico has imposed a $942 million (around ₹9,030 crore) penalty on Meta Platforms, ruling that the company's social media platforms contributed to harm affecting young users' mental health.

As part of the judgment, the court directed that $420 million (approximately ₹3,993 crore) be allocated towards treatment programmes for affected children and teenagers. The remaining amount will be spent over the next five years on awareness campaigns, prevention initiatives and mental health screening services.

The ruling follows a lengthy legal battle over allegations that Meta failed to adequately protect minors using its platforms.

Case Decided in Two Phases

The proceedings were conducted in two stages.

In the first phase, the court imposed a $375 million civil penalty after finding that the company was aware of child sexual exploitation concerns on its platforms but failed to take adequate action.

During the second phase, the court ordered an additional $567 million in penalties, bringing the total financial liability to $942 million.

Court Examined Child Safety Concerns

During the trial, prosecutors urged the court to require significant changes to Meta's platforms, including limiting addictive design features, strengthening age-verification systems, improving default privacy settings and enhancing safeguards against child sexual exploitation.

The case centred on allegations that Meta's platforms exposed children to harmful content while insufficiently addressing known safety risks.

Meta Plans to Challenge the Decision

Meta has said it disagrees with the ruling and intends to appeal.

The company argued that it continues to invest heavily in online safety technologies and content moderation but maintained that preventing every instance of harmful activity by bad actors remains a complex challenge.

Legal experts say the appeal process could determine whether Meta will also be required to introduce structural changes to its algorithms and child safety policies beyond the financial penalty.

Broader Regulatory Pressure May Follow

The judgment could increase regulatory scrutiny of Meta across the United States.

Reports indicate that attorneys general from more than 40 states are also pursuing legal action related to child safety and youth protection, potentially exposing the company to additional legal and regulatory challenges.

Attorney General Led the Lawsuit

The lawsuit was filed by New Mexico Attorney General Raúl Torrez, who alleged that Meta knowingly failed to make Instagram and Facebook sufficiently safe for children.

The complaint argued that the company's algorithms were designed in ways that encouraged prolonged engagement among younger users, contributing to mental health concerns such as depression, eating disorders and suicidal behaviour.

The lawsuit also alleged that Meta failed to adequately address the misuse of its platforms for child sexual exploitation despite being aware of the risks.

Court Notes Limits of Federal Privacy Law

While examining proposed remedies, the court observed that the Children's Online Privacy Protection Act (COPPA)limits the extent to which companies can be compelled to collect additional personal data from children for age verification.

The court noted that mandatory age-verification measures involving children's personal information could raise privacy concerns under existing federal law, making such remedies legally complicated.

The judgment primarily focused on financial penalties and funding for youth mental health initiatives, while further proceedings may determine whether additional platform reforms will be required.