Meta Found Guilty in Child Exploitation Suit – Fined $375M by New Mexico

Meta Platforms META -1.84% ▼ was found guilty in a long-standing child exploitation lawsuit in New Mexico and ordered to pay $375 million for violating the state’s children’s safety law. A jury ruled that Meta’s social media platforms, including Facebook and Instagram, are harmful to children’s mental health. Meta was found liable for failing to protect kids from sexually explicit content, solicitation, and human trafficking. META stock fell 1.9% on the news yesterday.

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The jury found Meta deceived users into believing its platforms were safe, endangering children and breaking consumer protection laws. The jury hit Meta with the maximum fine per violation, totaling $375 million.

Meta Rejects Verdict, Vows to Appeal

Meta rejected the verdict, insisting the company works hard to keep people safe on its platforms. A spokesperson acknowledged “challenges of identifying and removing bad actors or harmful content.” The company will continue to defend itself strongly and remains confident in its record of protecting teens.

During the weeks-long trial, New Mexico prosecutors showed internal Meta documents and testimony proving the company ignored warnings about platform dangers. They argued that features let pedophiles target kids and addict them on purpose. Meta denied the allegations, saying it has spent years investing in safety over growth.

In 2023, New Mexico AG Raúl Torrez sued Meta after an undercover op. They created a fake profile for a 13-year-old girl, which Torrez said was flooded with images and solicitations from child abusers.

A Historic Win Against Big Tech

Torrez called the verdict “a historic victory for every child and family who has paid the price for Meta’s choice to put profits over kids’ safety.” The case is one of many similar lawsuits by state AGs against Meta, Snap SNAP -3.33% ▼ , YouTube GOOGL -3.85% ▼ , and TikTok.

In Los Angeles, a jury is deciding a similar case where a young woman claims Meta and others made addictive apps that harmed her mental health. That suit is part of thousands of individual suits in California court. Plus, over 2,000 lawsuits from people and schools are pending in federal court.

Is META a Good Stock to Buy Now?

On TipRanks, META has a Strong Buy consensus rating based on 40 Buys and five Hold ratings. The average Meta Platforms price target of $865.58 implies nearly 46% upside potential from current levels. Over the past year, META shares have fallen 5.3%.

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