Why New Mexico's Win Over Meta Is a Big Deal
PLUS: A first successful vote on surveillance pricing.
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Last week was a rough one if you’re a social media executive, and a very good one for the general public promoting the rule of law. In two separate trials, juries held social media firms liable for harms experienced by their users, and the design and policy choices those leaders made that led to those negative outcomes.
One case, which has received the lion’s share of the press attention, occurred in Los Angeles, where a private plaintiff won a verdict against Meta (the owners of Facebook and Instagram) and Youtube. The jury agreed that design choices such as auto-play videos, infinite scrolling, and recommendation algorithms harmed the plaintiff’s mental health, contributing to her depression and suicidal thoughts.
A second case decided just the day before is what I want to focus on: In New Mexico, a jury found Meta (again!) liable for misleading users about the safety of its platform, and specifically harming children by claiming that its products were safe when they actually “enabled pedophiles and predators to engage in child sexual exploitation.” The jury order Meta to pay $375 million in civil penalties.
The case was brought by New Mexico Attorney General Raul Torrez, under New Mexico’s unfair and deceptive trade practices law, known as the Unfair Practices Act. “New Mexico is proud to be the first state to hold Meta accountable in court for misleading parents, enabling child exploitation, and harming kids,” said Torrez in a release. “The substantial damages the jury ordered Meta to pay should send a clear message to big tech executives that no company is beyond the reach of the law. Policymakers and law enforcement officials across the country can help make this verdict a turning point in the fight for children’s safety.”
The crux of the winning case is that Meta violated New Mexico law by deceptively declaring its products safe for kids when they decidedly were not. The complaint filed in the case by the AG put it this way:
In numerous instances, Defendants’ public statements and communications knowingly misrepresented, directly or indirectly, expressly or by implication, that their platforms were not addictive, that they prioritized young users’ well-being over profits, and that their platforms were safe, while concealing and/or misrepresenting their internal knowledge that the frequency of harms and harmful material or conduct encountered by young users on their platforms was far more pervasive than Defendants’ public statements revealed.
Much like the Los Angeles trial, the New Mexico case found that Meta’s platforms include addictive design features, which Meta put into place intentionally despite knowing how harmful they could be.
But it also goes further: The case heavily features the work of undercover investigators, both independent and employed by New Mexico, who found that Meta did not take down harmful and sexually explicit material of children even when it was flagged. “None of the content below was removed by Meta, and none of it is consistent with Defendants Meta’s and Zuckerberg’s representations that Meta maintains an environment that is safe for children,” said the state’s complaint.
New Mexico State investigators also created fake profiles of minors, as well as fake profiles of adults looking to traffic children. I’ll leave out the gory details, but suffice to say there were few barriers to those fake individuals accessing a real house of horrors.
And Meta leadership knew what people on its platforms could do, because it commissioned its own research, which it then ignored. As one former Meta employee and consultant explained, “[M]anagers including CEO Mark Zuckerberg do not seem to seek to understand or actually address the harms being discussed. Instead, they minimize or downplay published findings, and even sometimes the results of their own research. They also try to obfuscate the situation by quoting statistics that are irrelevant to the issues at hand.”
So the crux of the matter is: Meta’s leaders said one thing in public regarding the safety of their products, when they knew, or should have known, that what they were saying wasn’t true. To put a twist on the famous Watergate question: “What did Mark Zuckerberg know and when did he know it?” The jury agreed with New Mexico’s contention that he and other Meta leaders knew, and simply did nothing.
This case is a big deal both on the merits and because of the door it opens to potential future cases. Every state has some version of an unfair and deceptive trade practices law similar to New Mexico’s Unfair Practices Act, which are most commonly called “UDAP” laws (which stands for unfair and deceptive acts and practices). Also known as “Little FTC Acts,” because they grant states powers similar to those held by the Federal Trade Commission, these laws broadly protect consumers from deceptive and fraudulent business practices.
Now, not every state’s UDAP law is great, mind you, but every state AG does have something available, and there are all almost certainly looking at the New Mexico verdict and weighing similar cases under their own respective state statutes, either against Meta or other similar tech platforms.
New Mexico’s AG office is also relatively small and less well-resourced than those in larger states, such as Illinois, New York, Texas, or even Colorado. It’s surely going to be tempting for some of those states with significantly more oomph in their AG budgets to follow the path New Mexico has opened.
To be clear, I don’t want to get too far ahead of events: There’s still another phase of the New Mexico trial coming, in which the judge will determine whether Meta’s platforms constitute a “public nuisance” that require it to make proactive changes to address the harms detailed. And, of course, Meta will appeal. This is far from over.
But it’s possible New Mexico has drawn up a roadmap that other states and policymakers can use to rein in big tech and start to end the addiction tech firms have foisted onto the American populace.
UPDATE: The Colorado House voted last week to pass a bill banning surveillance price- and wage-setting, making it the first legislative body in the U.S. to approve such legislation. “Our online activity, not just what we post and buy, is being used to price-gouge us and intentionally offer low-ball salaries to pad the pockets of mega-corporations,” said Democratic Rep. Javier Mabrey, one of the bill’s sponsors. “We’re pushing back against these deceptive practices to save Coloradans money, allow small businesses to stay competitive in the market and increase incomes for the hardworking people of our state.” Read background on this issue here.
UPDATE II: Forgive the brief federal deviation, but it dovetails with many things I write about here: Sen. Bernie Sanders and Rep. Greg Casar last week introduced the Home Team Act, which would prevent owners of professional sports teams from relocating their franchises without first giving local buyers an opportunity to purchase the team. (Full disclosure: I worked with Casar’s office on the bill.) It’s obviously a long way from a bill with two sponsors to one that becomes law, but it reveals that the current state of affairs is a policy choice, and one we don’t have to accept forever.
SHAMELESS SELF-PROMOTION: I spoke to New Orleans Public Radio about abusive nondisclosure agreements in economic development in Louisiana. Read it here.
SIMPLY STATED: Here are links to a few stories that caught my eye this week.
“World Cup Economic Bump Is Starting to Look Like a Bust”
Gov. Bob Ferguson signed a law making Washington State the latest to ban noncompete agreements.
The Ohio attorney general certified an effort to collect enough signatures to put a data center ban to a statewide vote.
A new lawsuit alleges that DraftKings and FanDuel use various tactics to addict gamblers to their platforms.
“Utility CEO salaries have become a bipartisan foe”
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— Pat Garofalo
This was my first Boondoggle and I enjoyed it! Thank you
Save the kids...very insightful...