A lot of people on this story are making the usual snarky remarks that, oh, this is just a slap on the wrist—some trivial proportion of Meta’s global revenue. And that is true, but unlike the EU, for example, New Mexico is a tiny jurisdiction. It only has a little bit more than 2 million people.
So actually, a fine—or a judgment—of $942 million that applies just to New Mexico is enormous. If you look at Meta’s revenue from the U.S. and Canada and assign it proportionally by population, you find that Meta only earned about $1.5 billion to $2 billion total from New Mexico over the past five years. The exact figure depends on whether you allocate purely by population or account for purchasing power, which makes the estimate a little lower because New Mexico is a poorer state than the U.S. average.
Given that, the judgment is a half to two-thirds of what Meta could have obtained from New Mexico. So it is actually a serious deterrent, assuming Meta thinks New Mexico would continue to impose fines of that size.
I also think that there’s a good chance this judgment gets overturned or significantly reduced on appeal, but even if the fine drops to half its current level, it would be proportionately larger than almost any fine against any company, let alone tech, that I’ve heard of.
This analysis actually understates how massive and outsized the penalties are. The court ruling only applies to children in New Mexico under age 18.
New Mexico has ~450,000 people under age 18, of which roughly 140,000 are between ages 13-17 (Meta officially requires age 13+ to use their platforms). Recent Pew surveys of U.S. teens ages 13–17 show ~70% of teenagers use Instagram and ~30% use Facebook.
In New Mexico, Instagram and Facebook would have ~100,000 users in the 13-17 group. That's not everyone, some underage users may lie about their age, so add in ~30,000 unauthorized users under age 13. Overall, around 130,000 people in the affected class.
The judge assessed $942 million in total penalties, and dividing that $942 million across 130,000 users equals approximately $7,250 in fines per user.
If this fine remains, and Meta pays out to the affected parties, these kids could end up rewarded with thousands of dollars for just for having a Facebook or Instagram account. Which creates some bizarre incentives, minors get rewarded for signing up for the platforms that are harming them in the first place.
The point of a fine is to change behavior. It's not outsize if it's enough to do that.
>If this fine remains, and Meta pays out to the affected parties, these kids could end up rewarded with thousands of dollars for just for having a Facebook or Instagram account.
These platforms are so profitable precisely because they fleece users for way more value vis a vis their data than they get back in service utility. Balancing that equation is the right thing to do.
If this ruling results in Meta fully withdrawing from New Mexico because it's unlikely they'll actually net on a per customer basis than nothing of value will be lost.
Yes but Meta is being rewarded for harming children currently. So you're arguing, in fact, that we should not give kids money as restitution because it would create a bad "incentive" for them, rather than disincentivize the company that has already brought them harm from further harming them?
The status quo is already bizarre. Meta is actively profiting from harming minors. The alternative (minors getting a payout by visiting harmful websites) seems pretty tame by contrast, and in fact puts an active incentive on Meta to stop letting minors be harmed by their software.
One would argue the kids got paid for finding a dangerous place and entering. Up to the building owner to prevent access. It’s a form of giant bug bounty.
I wish I’d be paid a 7k$ bounty for every website where I can find an underage vulnerability.
The key thing is these people will get older and no longer be in that age bracket so you are relying on future groups in that age bracket to know this loophole which will be some but far fewer I suspect.
The inverse incentive is what's in place today: a platform actively harming the users who signed up for it, in pursuit of ad dollars. The incentive is to extract maximum revenue while disregarding the real-world effects of actions, including driving children to self-harm or mental illness.
That's bizarre. But I know for some people, it doesn't seem bizarre, and just seems like "capitalism."
The platform isn't actively harming. It's actively driving them to content they engage with. What they're choosing to engage with is harmful. The fact their parents let them on the platform is the crazy part, but the state already extracts vast amounts of money from them.
Why punish S.E. Massengill? It’s the parents, after all, who willingly allowed their children to drink sulfanilamide. Hell, if the children simply closed their mouths when the spoon is in front of them, they’d be perfectly fine!
This is a silly comparison. Social media doesn't instantly kill your children, and we've known it's bad for them for ages now so parents have had time to adjust. Give kids devices, win stupid prizes.
I just saw an ad for Instagram's teen features, aimed at parents. You can't advertise for your product and then say that people are using it of their own volition. We are right back to the 90s and Big Tobacco.
> The point of a fine is to change behavior. It's not outsize if it's enough to do that.
This is definitely not true, or legal. Would a billion dollar fine for speeding change some behaviors? Yes. Is it completely out of proportion? Also yes. There’s a reason punitive damages are capped. Yeah one way to stop bad corporate behavior is fining them into insolvency, but that doesn’t really help anyone unless the company is purely net negative. And those companies tend to die on their own, since you won’t get a lot of revenue if you don’t provide someone value.
>>"Would a billion dollar fine for speeding change some behaviors? Yes. Is it completely out of proportion? Also yes."
Maybe not the best example, since Finland does asses speeding fines based on income. So a 1bn fine would be appropriate if someone was ludicrously wealthy, although I'm not sure there's anyone rich enough on the planet to hit that mark. But for example, this guy [0] got a €54,000 speeding ticket in 2015. Honestly, this seems like a pretty good system. Would someone like Jeff Bezos even notice a speeding ticket in the US? The only real annoyance to him would be getting pulled over, the fine amounts to literal seconds of income. It doesn't seem unreasonable to me that fines and legal penalties should be in proportion to the income of the person or company they are being assessed against. Otherwise, you end up with the problem of legal penalties just becoming part of doing business, and ideally they should be changing behavior.
Can't remember where I saw it but some years back someone wrote something like "if the punishment for a crime is financial then it only deters poor people" which makes sense.
Even a few tens of billions in fines doesn't come close to putting Meta into insolvency. The histrionics are entirely uncalled for.
A billion dollar fine is entirely unnecessary to dissuade a typical driver from speeding. The fine needs to be enough to change the behavior, not 500,000,000% that amount.
Meta is worth $1.5T while most of us getting tickets are worth less than $200K. Meta brings in $200B/yr. Taking 10% of that, even 20%, would hardly slow the company down in most of its business.
I think 15% of revenue per year of uncorrected behavior is about the right amount. After a few years of that, I'd wager Meta would start to change how it treats children, probably by screwing over adults even more, but that's fine with me. Adults get what they deserve. Children deserve better than being handed over to a mega-corporation for monetization.
My point is that saying “there is no unreasonable fine if it works” is naive absolutism. Even with proportional fines, does fining someone 99% of their income count as too high? If proportionality is irrelevant than there is no way to differentiate which crimes deserve what punishments.
It depends. Does fining someone 99% of their income make it impossible for them to live with basic dignity? There are many, many people for which it wouldn't, especially if you limit to W2 income (as so many income-based tests do).
I've long been of the opinion that the focus on "how much is being taken" is wrongheaded, and pushed primarily to advantage elites. What about, "how much are you left with?" Now, suddenly, it's in their best interests for the popular understanding of "enough to live on" to be quite high.
If we're talking perverse incentives, we are currently living in a regime worse than many of the alternatives.
IDK, even if you take your analysis to the extreme and say only 1% of those children suffered actual harm, it doesn’t seem unreasonable that the cost would be > $725k each, measured in impact to lifetime earnings plus the costs to their parents and community.
There’s a good argument for using the funds to support mental health programs, but as far as paying for damage done, Meta is getting off very light here. Classic privatize profits, socialize costs.
Maybe, but in the official verdict they didn't take into account all affected children either; they only used an estimated 37,500 affected teen users to calculate the fine.
Meta was fined for:
- 37,500 instances of deceptive-practice violations @ $5,000 per
- 37,500 instances of unconscionable-practice violations @ $5,000 per
- 75,000 total violations x $5,000 = $375 million
The rationale for only using 37,500 users (instead of the actual user count), and choosing $5,000 per instance (the maximum amount allowed by law) is unclear to me.
The second case is even more confusing, New Mexico requested $953 million from Meta to pay for its "equitable share" of a $3.7 billion public-nuisance abatement program state experts created. A judge reduced this amount to only $567 million, determining that:
1) other platforms also share responsibility, and
2) some proposed expenses were too broad (ex: the judge denied the request for the construction of entire new hospitals and clinics as part of the program).
Kids are not going to see a dime of that money. It will get spent on a lot of political churn, propaganda, pet projects, and maybe some programs that will pay for a couple of hours of counseling for the kids.
It's government action, not a civil lawsuit. Of course the kids aren't going to see a dime of that money. If they want cash, they (individually or as a class) have to sue Meta themselves.
Who cares? If it’s taken away from Meta and can no longer be used to build more technologies for Meta, that’s a massive upside to kids all by itself. Doubly-so if the fine incentivizes Meta to stop doing this shit. You could put the money in a big pile and light it on fire and it would still be a net win for society.
> If this fine remains, and Meta pays out to the affected parties
Did you even read the first line of the article? "A New Mexico court has ordered Meta ... to pay $567m into a fund aimed at redressing adverse mental health impacts". It does NOT go to the children's purses. There's also a fine, which --as fines do-- goes to the state. Not to the individual children.
As critical as I am of NM, I don’t know that this is true. The state has been funding mental healthcare for 2+ years out of gross receipts revenue. A large part of this goes to Medicaid recipients - NM is one of the highest paying states for Medicaid providers, at least for mental health. The money from this may very well go into a public coffer used for similar purposes, ultimately paying out to private providers while mostly bypassing our broken health insurance system.
I do question whether therapy services and the like are the best use of public funds for the people of NM. A lot of the state’s problems stem from a lack of economic opportunities, therapy isn’t going to help that. The state also carries a heavy burden of generational trauma which this could go some ways towards addressing, I suppose.
The minors are not getting the money. However, if I were a minor and knew me signing up for Meta would cost them five figures, I would absolutely sign up
It means that Meta can’t have squishy hand-wavy policies to keep minors off the platform, they’ll have to do real work and build real tools to keep them off because those minors are now a potential cost-center.
Alternatively, they could just stop using manipulative tactics and continue to allow minors. That’s an option available to them as well.
> If this fine remains, and Meta pays out to the affected parties, these kids could end up rewarded with thousands of dollars for just for having a Facebook or Instagram account. Which creates some bizarre incentives, minors get rewarded for signing up for the platforms that are harming them in the first place.
what does this really mean? you think kids in other states are going to rush out to make a facebook account in the hopes of getting the next payout?
The "incentive" doesn't exist because by the economies of these networks everyone is at this point at the very least profiled by Facebook so that they can be targeted by malfeasant ads, and a very large majority are already enrolled. Therefore, the harm has happened without having incentivised anyone.
> minors get rewarded for signing up for the platforms that are harming them in the first place.
Vietnamese labor laws require higher salaries and more time off for working in hazardous/toxic conditions. These jobs become more attractive than the less toxic/hazardous ones.
i don't think you're thinking through the incentives-- with higher labor costs the employer has an incentive to take steps to make the job less hazardous.
You say this is as though I were dunking on the idea of hazard pay, and that my dunking deserved a riposte dunking. I am not against hazard pay. Companies have not eliminated hazardous work in Vietnam yet, so the incentive has not gone all the way to its intended end.
But isn't a fine meant to hurt? I mean, isn't this the reason we have those X% of Y fines? So it seems less relevant how many people were harmed than who harmed them.
> Which creates some bizarre incentives, minors get rewarded for signing up for the platforms that are harming them in the first place.
Oh please. Was the whole "calculation" just to make this seem like a well considered argument, or what?
If the payout was to an entity other than the harmed one, you could say now that entity has incentive to have those minors harmed, instead. "Bizarre", heh.
I'll be explicit in saying that this is because "third-world shithole" is often used as a pseudo-euphemism for "brown people reside there" - as in, this place is dysfunctional because of its brown residents. And, for the US, this is just simply not the case. We are an ethnically pluralistic society, historically and largely run by white men, and, yes, something of a shithole precisely because our government and courts exhibit a particularly Western flavor of corruption.
No matter how you want to rearrange and inflate the numbers, it doesn't change the fact that the total amount does not cause any harm to Meta. This isn't a fine, its a tax. It's the cost of doing business. Meta certainly made more than $7.25k over the lifetime of each of those accounts.
Maybe $7k will help these kids, but I doubt it, even if they receive the full amount. But Meta remains unaffected and free to continue harming other kids. That's the whole point of the complaints. Even if it were $7m or $700m per head, if Meta isn't harmed by the fine, it won't stop them harming more people now and in the future.
It's great that an incredibly small number of people might theoretically get some money that hypothetically will be used to help them, but I'm far more concerned about everyone meta is still harming
Meta certainly made more than $7.25k over the lifetime of each of those accounts.
From those accounts? Doubt. Sure they make money from other things too, but I don't mind them making money from legitimate business activities. I am not a fan of the company but plainly they provide value to a lot of their users even if I consider their products mediocre and boring.
As a result, Rhode Island has some great followup and public health programs. It wasn't that much money to DuPont, but it did real good in Rhode Island, and I believe DuPont changed their legal tactics afterwards.
Maybe so but DuPont continues to pollute the world even today.
I'm happy this fine happened. I hope it gets enforced, though in the current political climate I too have severe doubts it will be. Even so though, and even if this lawsuit is followed by many others in many jurisdictions that are all equally successful- the dream- the people behind these decisions still leave without a hitch.
As long as sociopaths can sit atop corporate entities, do horrendous shit, and then simply leave wildly rich and free, even with the corporate entity in flames, that is not justice and we'll continue getting exactly what we've gotten: an endless stream of the aforementioned sociopaths harming people at scale, for money.
Not trying to be a doomer. Just trying to say when the sum total of personal consequences for these people is a lot of bad press and billions of dollars, it's an easy choice for too many.
My point was more about the positive outcomes from these kinds of fines, rather than about _forcing_ corporate behavior change. If corporations are going to act like psychopaths, let's at least make them pay a tax for it with fines like this.
Oh yeah for sure, I'm not suggesting the fine is bad, I'm suggesting it's insufficient. I want to "yes and" this, not replace it.
Fine them, and incentivize change for them and all other businesses in the space. Fines just clearly, demonstrably don't do that. Jail time for executives would, IMO.
Bigger fines would, too. If you gain $1B by doing an action, but you have a >10% chance of a >10B fine, it's expected value is negative.
The 10% and 10B might need to be extra high to account for hyperbolic discounting, but I think we could get there just by increasing those numbers. Shortening the time from gain and fine would also help. I don't think we can get it into a single-quarter cycle, but most CEOs don't want their company bankrupted five years down the line, either.
Imagine that. Forget the corporate veil, if you are invested heavily in a company you are financially enabling the harm they do. Maybe you should also be somewhat legally liable for the harm they do too
While they wait decades for the court cases to resolve they can take the amount of money they were fined and invest it. They have so much money they wont even notice it and they'll have made a profit on the whole thing by the end of it.
A corporation will shift the capital loss to a tax write off like any other firm.
The taxpayer just takes a dollar out of their pocket, and pays a dollar in tax revenue short fall. This fine changes nothing, punishes tax payers, and Meta will just lobby more politicians. =3
Ok, maybe a few of them are fine people who have too much money, but the vast majority of them are in their position because they were willing to siphon money from lower classes using unethical means. Of all of the competitive advantages you can claim, the "no moral scruples" one is the most persistent.
I suspect if they fail to figure out a way to socialize the losses (they won't), than the identical lost-revenue value will be deducted from nonvoting shareholder 401k investments.
People need to understand single jurisdictions are practically meaningless for large multinational corporations like Meta. =3
Sometimes I wonder if these comments are about lamenting the state of big corporations, about defending big corporations, [1] or about lamenting how fungible value exchange were even the Rule of Law can be reduced to an expense makes everyone except for conentrated wealth into losers.
[1] “They won this battle and the last one. But the other side has millions of soldiers. They will just replace them.”
It is not personal opinion, but rather a fact of doing international large business.
Sometimes doing "something" means the political posture of appearing to do "anything popular" with the naive, and achieving nothing but the status quo within a year.
If our legal systems were serious... they would have split up the company, and Chapter 7 divisions that failed to fix problems the judge ordered addressed. =3
You have the right idea, but remember that tax rate is not 100%. So if a company gets a fine on X dollar, that reduces their surplus by X, and they pay e.g X*20% less in tax (if the tax rate is 20%).
LOL. Yes, let's do absolutely nothing, that always works well.
This fine also sets a precedent that some will follow. When New Mexico does it, ok, avoidable. If NY, California, etc start doing it, at some point there is no place left to run to.
Cuteness, sometimes a small trans identifier, sometimes an in-community joke or reference. Here I’m not exactly sure. But it’s not too far from UwU and similar
I don't understand the logic. If I got 1000 from a mentally challenged adult by manipulating them, do I get 200 in fine or should all 1000 get confiscated from me?
I guess the question could be: "how much Meta did by directly or indirectly damaging people mental health in New Mexico?". Note that the damage could be more or less subtle: someone could have been affected in great measure and become, for instance, depressed, while someone else could have been only mildly affected and just become a doom scroller. Is there a level of reasonable damage that could be tolerated? In my personal view, no, there isn't, and in theory all the earnings deriving from that person should be confiscated (and only after that you can apply the sanction). Unfortunately this won't be practical, and the only remaining option would be to heavily regulate or ban platforms that are engineered on people psychological weaknesses, and when tolerated they should be taxed to the sky (like tobacco and alcohol, or even more)
I don't disagree with anything said here, but it sure would be nice if Meta (and any other companies building social media applications) focused more on what's right for children, both short and long term, than the math of what is profitable.
The problem is that "what's right for children" should be better parental controls, and better enforcement of treating self-declared ages under 18 separately. Instead, the New Mexico AG and other assholes believe it means we need more mass surveillance, mandatory age verification, bans on encryption, and other insanity.
It's a bit of a tangent, but Meta actually really annoys me
Is the general war on encryption bad? Yeah
Meta? Meta forcibly upgraded people on Messenger. Now chats are broken. First they took away your friends https://news.ycombinator.com/item?id=4151433 and then they REALLY took away your friends, by doing this
this is true and the knock-on effect of this is that other states with intrepid AGs and consumer protection bureaus now have a case law example to cite in their arguments
the hope is that if other AGs pursue these measures that they do their due diligence of creating a case that FB's corporate lawyers won't be able to defeat in subsequent trials. otherwise case law will ultimately let large, unaccountable corporations like Meta win-out in perpetuity
so this is a great battle won but there's a long road ahead for the larger legal strategy. and I do hope it's very long - the current Supreme Court ideological makeup does not favor consumers or citizens at the moment and it'll take decades for the insidious work of the Federalist Society to be mitigated
The New Mexico AG behind this case is Raul Torrez. He's a fascist/authoritarian asshole who has been using this case to try and force mandatory online age verification on everyone while also banning encryption.
The last thing we need is for other state AGs to try to copy him.
I don’t think any of those are nearly at the scale of Meta, at least in terms of how many people they touch.
Meta allegedly has 3.6B daily active users across their products; something like 1 in 2 people globally is a daily user of one of their services.
Meta is also in the business of interpersonal relationships, which is a nightmare. Banks, telcos, etc mostly deal in simple things that are complicated by doing it at enormous scale.
Interpersonal relationships are complicated even at small scales, and at large scales it’s virtually impossible to predict what behaviors will emerge. They took a complicated thing and scaled it into a globally ubiquitous process, and just gave up on doing it well at some point (because they can’t, and I don’t think anyone can).
Then break them up or shut them down. They can't just continue to knowingly and intentionally induce addiction and engagement for profit and then shrug their shoulders and say "we're too big, it's too hard to stop."
While the calculation is not wrong, there are other factors at play in Meta's decisions.
First, how likely is it that similar rulings happen in other states or countries? While proportionally to the population the fine is significant, it isn't over Meta's global market. It can be only if similar fines will happen at a high enough rate.
Second, what is the global cost of adapting the whole platform to the ruling? (Assuming they don't build exceptions for users in New Mexico like Apple does)
Both factors have an influence, so if the fine is unlikely to be replicated, which it probably is, and the cost of adapting is exceedingly high, which certainly is, then Meta will continue their practices.
there is no evidence available on that, perhaps people should go ahead and built it, but in cases such as this if NW thinks it would get a decrease or reversal on appeal it might settle for a lesser amount. I think a 90% decrease seems way too much for anyone to agree to. Frankly if I was NM and I won that much I don't think I would agree to a 50% decrease either, 25% decrease would seem to be a reasonable offer that Meta would have to be crazy not to accept. My opinion, not a lawyer and I have been told I am too aggressive in negotiations too.
on edit: part of reason why there is no evidence of that is in cases like this settlements might be secret, although with a state involved I guess it can't be, but being able to track how much fines actually decreased on appeal etc. and a typology of cases etc. would be nice to have, but also probably impossible to have.
IF they want to fix the behaviour of mega-corporation,
there must be mandatory jail sentence. When Suckerberg
goes into prison for the next 10 years, no way to weasel
out, only then will we see a change in the real behaviour
of these guys. So your claim that this is more than a
slap of a wrist, is really not accurate here.
So actually, a fine—or a judgment—of $942 million that applies just to New Mexico is enormous. If you look at Meta’s revenue from the U.S. and Canada and assign it proportionally by population, you find that Meta only earned about $1.5 billion to $2 billion total from New Mexico over the past five years. The exact figure depends on whether you allocate purely by population or account for purchasing power, which makes the estimate a little lower because New Mexico is a poorer state than the U.S. average.
Given that, the judgment is a half to two-thirds of what Meta could have obtained from New Mexico. So it is actually a serious deterrent, assuming Meta thinks New Mexico would continue to impose fines of that size.
I also think that there’s a good chance this judgment gets overturned or significantly reduced on appeal, but even if the fine drops to half its current level, it would be proportionately larger than almost any fine against any company, let alone tech, that I’ve heard of.