If Meta’s court loss from two weeks ago in New Mexico left the company’s shareholders shaken, the court battle that is just beginning in California could turn out to be an existential crisis for the social media giant.
Meta shares closed trading down 3.54% Monday, August 17, as markets seemed to prep for the beginning of opening arguments Tuesday in the trial against the company over allegations that it purposefully got teens and children addicted to its social media platforms.
Four states – California, Colorado, Kentucky and New Jersey – are seeking up to $1.4 trillion in penalties against Meta, which they claim violated consumer protection laws, including the Children’s Online Privacy Protection Act.
Meta’s last-ditch effort to stop the trial was rejected last week by the Ninth Circuit Court of Appeals, which ruled that Meta did not have the “immunity” from liability its defense asserted under Section 230 of the Communications Decency Act.
Meta contends that the district court’s denial of its Section 230 immunity is immediate grounds for appeal should it lose the trial.
“On the eve of trial, Meta has resorted to seeking an emergency stay in the appellate courts. Meta’s latest effort to get out of taking accountability has failed — again,” said California Attorney General Rob Bonta.
The lawsuit was originally filed in 2023.
Meta filed a motion to dismiss in 2024 that was rejected and also attempted to obtain a summary judgment in June that would have terminated the lawsuit.
What is Meta accused of doing?
Back in 2023, a coalition of 33 attorneys general led by California’s Rob Bonta filed a lawsuit in the U.S. District Court for the Northern District of California alleging that Meta “designed and deployed harmful features on Instagram and Facebook that addict children and teens to their mental and physical detriment.”
According to Bonta, “Meta has been harming our children and teens, cultivating addiction to boost corporate profits.”
The lawsuit claims that Meta created a business model “focused on maximizing young users’ time on its platforms” while it also used “harmful and psychologically manipulative” features to keep them addicted. It also claims that Meta misled the public about the safety of those features.
According to the lawsuit, those harmful and psychologically manipulative features include:
- Dopamine-manipulating recommendation algorithms.
- “Likes” and social comparison features known by Meta to harm young users.
- Audiovisual and haptic alerts that incessantly recall young users to Meta platforms.
- Visual filter features that promote body dysmorphia.
- Infinite scrolling designed to discourage users’ ability to self-regulate.
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Meta is also accused of trying to “conceal and downplay” the psychological and physical harm that its platforms can have on young people “despite the strong and well-researched links” between its use and adverse effects on them.
“Meta designed a dangerous product for young users, knew it to be dangerous, and then lied to children, families, and the community about how dangerous it was. We are ready to hold Meta accountable for its role in fueling the mental health crisis of American children and look forward to trial,” Bonta said.
What’s at stake for Meta?
The lawsuit against Meta alleges that the company has been in violation of the law protecting children since “no later than 2012, and such claims have continuously accrued through the present.”
That accrual helped shape the $1.4 trillion in damages the lawsuit seeks, but the attorneys general are looking for more than monetary restitution. They are also seeking major changes at the $1.46 trillion company.
While Meta currently has an age limit of 13 for most general accounts, the lawsuit claims that the company’s age verification system is severely lacking.
Stronger age verification is just one of the changes states want Meta to make; others include changes to its algorithms that make it so that it is less addictive, the removal of image filters that contribute to body dysmorphia, ending autoplay on video content, prohibiting the creation of multiple accounts, and blocking Instagram Stories.
While those features are part and parcel of the Meta user experience for adults, the lawsuit claims that children should not be exposed to them.
Meta lost but will appeal in New Mexico
Earlier this month, Meta was fined $567 million by a New Mexico court over its failure to warn the public about the dangers its social media platforms presented to children.
It was the largest fine the company has ever faced over child safety. That fine was in addition to the $375 million it was already ordered to pay in the case, bringing its total to $942 million.
“We disagree with the ruling and will appeal,” Meta said after the ruling, according to the BBC. “We work hard to keep people safe on our platforms and have been transparent about the challenges of identifying and removing bad actors and harmful content.
“We remain confident in our record of protecting teens online and will continue to defend ourselves against claims that misrepresent the facts.”
Meta has also said it intends to appeal the $375 million verdict.
Judge Bryan Biedscheid, who presided over the case, was very forceful in his condemnation of Meta following the ruling.
He said the harms wrought by Meta were a “public nuisance” and said that the harmful effects of the company’s policies were on par with “noxious pollution produced by the factory [that] can harm the common public right to reasonably clean air.”
He also identified “the psychological harm and sexual exploitation of children to be the pollution that must be abated.”
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