Meta Faces $942 Million in Penalties as Court Orders Teen Limits on Instagram and Facebook
Meta has been hit with another major legal setback after a district court in Santa Fe fined the company $567 million on August 6 and ordered sweeping changes to how Facebook and Instagram work for teenage users in New Mexico.
The new penalty comes on top of a $375 million jury award issued in March, bringing Meta’s total bill to $942 million. While that number is enormous, it is relatively small compared with Meta’s reported corporate profit of around $60 billion in 2025. Investors appeared mostly unfazed, with the company’s share price slipping by less than half a percent in after-hours trading.
The financial penalty is only part of the story. The court’s new restrictions could have a much bigger long-term impact, especially if other states or countries follow a similar path.
Under the ruling, Meta must limit Facebook and Instagram use for minors to 90 hours per month. That total applies across both platforms combined, meaning teenagers under 18 can use Facebook and Instagram for just under three hours per day on average.
The court also introduced a mandatory “quiet period” for teen accounts. Meta is barred from sending push notifications to minors between 10 p.m. and 7 a.m. every day. During the school year, the notification ban expands to cover school hours from 8 a.m. to 3 p.m. on weekdays.
There are some exceptions. Direct messages from contacts can still go through, and Meta may continue sending legitimate security warnings or emergency alerts. But the ruling is clearly designed to reduce late-night scrolling, school-day distractions, and the constant pull of social media notifications.
Another major change involves likes. For users under 18, Meta must hide public like counts by default on posts. If a teenager wants those like counts visible again, parental consent will be required.
The court also placed restrictions on Meta’s AI chatbots. Users under 18 in New Mexico may not engage in romantic or sexualized conversations with the company’s chatbots. Adults are also barred from using the bots for sexualized role play involving anyone under 18.
This part of the ruling puts Meta in a difficult position. During the trial, the company reportedly argued that teenagers are highly skilled at bypassing safeguards. The court then pointed to the same concern when evaluating Meta’s AI chatbot behavior, raising questions about whether the company’s protections are strong enough when young users try to work around them.
One of the most important parts of the case is how the court handled Meta’s legal defense. Meta argued that Section 230, a major U.S. internet law that protects platforms from liability for user-generated content, should shield the company.
The court rejected that argument in this context. Judge Bryan Biedscheid found that New Mexico was not trying to hold Meta responsible for what users post. Instead, the state was challenging Meta’s own product design choices and their effects on young users.
That distinction could matter far beyond this case. The ruling suggests that platforms may face legal responsibility not only for content moderation issues, but also for the way their apps are designed to encourage engagement.
However, the court did not order Meta to change certain controversial features, including algorithms, autoplay, and infinite scrolling. Although the ruling described those features as harmful, the court found that Section 230 still protects Meta in those areas. WhatsApp was not included in the order.
The judge also declined to require strict age verification. According to the ruling, federal children’s privacy law creates complications because it limits how companies can collect data from children or track them, even for age-checking purposes.
Judge Biedscheid also said it would be unfair to impose such a requirement only on Meta. Broader age-verification rules, he suggested, should be created by lawmakers rather than ordered by a single court. He pointed to places such as the United Kingdom, the European Union, and Australia, where governments have moved through legislative channels to address online safety for minors.
For now, the restrictions apply only to users in New Mexico. A key unanswered question is how Meta will determine which users are covered. One possible approach would be checking whether accounts are accessing Facebook or Instagram from New Mexico IP addresses, though the court did not provide a detailed implementation plan.
The ruling also does not appear to set a clear deadline for when Meta must put the changes into effect. Meta has already said it plans to appeal, meaning the final outcome could take time.
Still, the decision marks a significant moment in the growing debate over teen social media use, online safety, AI chatbots, and platform accountability. Even if the financial hit is manageable for Meta, the court’s focus on product design could influence future lawsuits and legislation aimed at protecting young users online.
