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Raul Torrez is drafting bills that would remove penalty caps and extend liability to AI chatbots, one day before 29 attorneys general opened against Meta in Oakland. States are setting the floor.
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New Mexico Attorney General Raul Torrez is working with state lawmakers on two bills strengthening online consumer protection and child safety, and the package is expected to extend beyond social media to cover artificial intelligence and chatbots [1][3]. Fortune reported the effort, citing the Guardian, one day before 29 state attorneys general were set to face Meta in a separate federal trial in Oakland [1][2].
One of the bills would remove the cap on penalties for violating New Mexico's consumer protection laws [7]. That is the detail operators should read twice. A statutory cap is a number a finance team can model and reserve against; removing it converts a known ceiling into an open question decided by a judge and a jury. Torrez told the Guardian his office will keep lobbying Congress while also working at the state level on both a comprehensive social media safety bill and updated consumer protection law [7].
The leverage behind this is a fresh judgment. On Aug. 6, First Judicial District Judge Bryan Biedscheid ordered Meta to create a $567 million abatement fund on top of $375 million in civil penalties a jury imposed in March, bringing total New Mexico liability to $942 million [9]. The abatement fund is roughly 60 percent of that total [2], which is the part of the remedy that does not look like a fine at all. The court also imposed five years of reforms including age verification, overnight limits on push notifications, and mandatory time-use limits for users under 18 [10]. A Meta spokesperson told Fortune the company disagrees with the ruling and will appeal, and said it remains confident in its record of protecting teens online [8].
"I think there's a lot of momentum coming out of our victory in court, and the idea is to build on that momentum," Torrez told the Guardian [3]. He is not stopping at legislation: his office is pursuing a second case against Meta over data privacy and civic harms with trial expected in September, and he said he is preparing to sue an AI company over a chatbot to which children have formed emotional attachments [5][6]. The New Mexico Attorney General's office declined Fortune's request for comment [4].
The federal contrast is the story. Congress has moved in fits and starts on the Kids Online Safety Act and the App Store Accountability Act, and the Federal Trade Commission has pulled back from social media rulemaking even as kids spend more than four hours a day online [11]. Haley Hinkle, policy counsel at Fairplay, told Fortune that states have been leading and urged Congress to pass KOSA to bring baseline safety-by-design standards nationally [12]. Julie Scelfo of Mothers Against Media Addiction told Fortune it should not matter whether a company makes food, toys, vehicles or digital products [13]. Both framings assume the same thing: the enforceable rules are being written in state capitals.
The mandates themselves remain unsettled. Most Americans doubt existing age verification laws will work, and reporting has shown Gen Alpha users routinely get around the age checks that exist [14].
Watch for the actual bill text in the coming weeks, specifically whether chatbot liability attaches to a product category or to conduct, because that determines whether a small AI vendor with no New Mexico users is in scope. Watch the September privacy trial, the promised chatbot filing, and whether other attorneys general copy the uncap language rather than the child-safety headline.
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Ranked by verification strength, evidence, and original report placement.
New Mexico Attorney General Raul Torrez is reportedly working with state lawmakers to draft two new bills strengthening consumer protections and child safety online, per Fortune citing the Guardian.
The reported legislative push came the day before 29 state attorneys general were set to face off against Meta in a separate federal trial in Oakland, California, with opening statements Tuesday in the case brought by California, Colorado, Kentucky and New Jersey as part of the 29-state coalition that sued Meta in 2023.
The legislation is expected to be announced in the coming weeks and would extend beyond social media to cover artificial intelligence and chatbots; Torrez told the Guardian: "I think there's a lot of momentum coming out of our victory in court, and the idea is to build on that momentum."
In an Aug. 6 ruling, First Judicial District Judge Bryan Biedscheid ordered Meta to create a $567 million abatement fund on top of $375 million in civil penalties a jury had already imposed in March, bringing Meta's total New Mexico liability to $942 million.
Congress has moved in fits and starts on the Kids Online Safety Act and the App Store Accountability Act, while the Federal Trade Commission has pulled back from social media rulemaking even as kids spend more than four hours a day online.
Haley Hinkle, policy counsel at child advocacy group Fairplay, told Fortune that states have been leading the charge on children's online safety and data privacy and urged Congress to pass the Kids Online Safety Act to bring baseline safety-by-design standards to all children in the U.S.
Evidence-backed comparisons of source perspectives and observed adoption signals. Read the methodology
Which Builder, Operator, and Investor concerns the observed source mix emphasized—not a truth score.
Evidence, demonstrated adoption, hype gap, incentives, and confidence are assessed independently, each on its own current evidence. How these are measured.
Court record firm, legislative core secondhand
The judicial facts are specific and checkable: a named judge, a dated Aug. 6 order, itemized amounts, and enumerated five-year reforms, plus an on-record Meta statement and two named advocacy voices. The story's own headline premise — two draft bills that would uncap penalties and reach AI and chatbots — rests entirely on Fortune relaying a Guardian interview, with no bill text, sponsors, or calendar, and with the AG's office declining to comment to Fortune. Single-publisher cluster caps how far the evidence can be scored.
Mandates live on one company; legislation not yet introduced
Real-world uptake is narrow but not zero: New Mexico has an enforceable order imposing five years of design mandates on Meta, and a multistate federal trial was opening. Against that, the bills at the center of this story do not exist publicly, the threatened AI chatbot suit is unfiled, the second New Mexico case has only a projected September date, and Meta is appealing, so nothing here has yet generalized into obligations on other platforms or AI vendors.
Framing runs ahead of unwritten bills
The cluster's framing treats chatbots being pulled into scope and penalty caps being removed as near-accomplished, when both exist only as an AG's description of drafts not yet announced, with the AG's own office declining to comment. The already-decided parts of the story are stated accurately and even conservatively — the $942 million figure, its 60 percent abatement composition, and the appeal are all disclosed — which keeps the overstatement moderate rather than severe.
Every named voice is a party to the fight
The sourcing is dominated by interested parties: an elected attorney general promoting his own courtroom win as momentum for his legislative agenda and a threatened new suit; Meta defending an adverse judgment it intends to appeal; and two child-safety advocacy organizations whose mission is served by exactly the outcome being reported. No neutral legal analyst, industry compliance voice, or civil-liberties perspective on mandated age verification appears, and the core scoop was granted to a different outlet, which shapes what was disclosed.
Solid on the judgment, thin on the legislation
Confidence is asymmetric. The New Mexico judgment, its composition, the mandated reforms, Meta's appeal stance, and the federal trial schedule are all well enough specified to rely on. The forward-looking core — uncapped penalties and chatbot coverage — is single-outlet, secondhand, unconfirmed by the AG's office, and unaccompanied by any document, so it should be treated as a signal of intent only.
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