Meta, Google Risk Big Tobacco-Like Fallout After Addiction Trial

A landmark jury verdict holding Meta Platforms Inc. and Alphabet Inc.’s Google liable for harming a young user with products designed to be addictive threatens to put the social networking companies in the same category as Big Tobacco and opioid makers — a potential crack in their shield from legal responsibility for what happens on their platforms.

While the $6 million in damages a jury in Los Angeles awarded to the 20-year-old plaintiff — which the companies vowed to appeal — will barely register on their balance sheets, the impact of the verdict will likely be more damaging and harder to quantify. The loss, in the first of thousands of product-liability lawsuits against Meta, Google and other social networks, is the kind of black eye that often leads to an increase in government regulations.

Unless the verdict is overturned on appeal, the companies may need to change how their products work, a move that could jeopardize the valuable advertising businesses that keep platforms like Instagram and YouTube so profitable.

“This is going to be the era of products liability,” said Jess Miers, an assistant professor at the University of Akron School of Law. Miers wasn’t surprised by this week’s verdict and said it could be a turning point for how people access information online.

“I think it perfectly reflects the animosity that people are feeling toward tech,” Miers added. People see these tech giants “as not just companies that provide us access to content, whether we like that content or not, but who also have a large role in the way that our democracy is functioning or not functioning, and our sort of broader humanity as well.”

For years, social media companies have been shielded from most legal threats thanks to laws that grant them immunity from the potentially inflammatory or damaging content their users post. This week’s verdict changed that calculus. The content on Meta’s Instagram and Google’s YouTube wasn’t the focus of the trial. Instead, plaintiffs attacked the companies’ designs and core functionality, creating a world in which they could continue to get sued unless the products are changed accordingly.

The trial is the start in a long line of similar lawsuits facing Meta and Google, as well as other social media companies including Snap Inc. and TikTok Inc. The platforms have been sued by thousands of individual users alleging personal injury, and by more than a thousand school districts claiming their products are hurting students and making it harder for teachers to teach.

State attorneys general in roughly 30 states are also suing the companies. New Mexico already had its day in court against Meta — and this week won a $375 million verdict after a jury found the company misled teens about keeping them safe from sexual exploitation.

The verdicts from California and New Mexico may be a sign of things to come.

“It generates a lot of momentum,” said Lexi Hazam, one of the lead attorneys representing personal injury plaintiffs and school districts in similar cases against the social media giants. “We have the wind at our backs going into the next trials. And these companies are under a lot of pressure.”

Hazam will be part of the trial team in the next major case to see a courtroom, which is scheduled for June and features a school district from Kentucky as the plaintiff. Because many of the trials include similar or even overlapping evidence, she was encouraged by the jury’s findings in California and New Mexico.

“We’ve now seen how powerful that evidence is and how credible to juries it is,” she said.

Meta and Google said Wednesday they will appeal the verdict in Los Angeles. “Teen mental health is profoundly complex and cannot be linked to a single app,” a Meta spokesperson said in a statement. “We will continue to defend ourselves vigorously as every case is different, and we remain confident in our record of protecting teens online.”

Possible Product Changes

The school districts suing the social media companies are also seeking changes to the way the platforms work. That could pose a threat to the advertising businesses that depend on users’ attention to generate revenue.

Hazam and her legal team are targeting features they believe lead to addiction, such as push notifications, and are urging better age verification tools and parental controls to protect young people.

Any changes that decrease the time people spend scrolling, sharing and interacting on these networks could hurt the companies’ profits.

“This could resort to them changing how their apps function, how their platforms function,” said Minda Smiley, a senior social media analyst at Emarketer. Any substantial changes to the product “could alter — and likely would alter — how advertisers want to show up there.”

Read More: How a Social Media Addiction Trial Threatens Big Tech

Even if a verdict doesn’t force the companies to fundamentally change the way Meta’s Instagram and Google’s YouTube work, new laws might. Some child safety advocates see congressional action as the surest way to ensure design or product changes happen. While US lawmakers are often hotly divided, children’s online safety is one of the few areas where they’ve been able to agree.

Mark Zuckerberg, chief executive officer of Meta Platforms Inc., exits a Los Angeles courtroom on Feb. 18 after testifying in the social media addiction case.

Photographer: Kyle Grillot/Bloomberg

“Congress always acts slowly until they act extremely quickly,” said Sacha Haworth, executive director at the industry watchdog Tech Oversight Project. Oftentimes “there needs to be a galvanizing moment for Congress to act — and this is that moment.”

US Senators Marsha Blackburn, a Republican from Tennessee, and Richard Blumenthal, a Democrat from Connecticut, have been leading proponents of children’s safety issues for years. They seized on the verdict Wednesday, hoping to build momentum for the Kids Online Safety Act, a bill they first introduced in February 2022 that has not yet become law.

“I would urge any member of Congress that continues to do Mark Zuckerberg’s bidding to look at this verdict and their conscience,” Blumenthal said, referring to Meta’s chief executive officer.

Settlement Options

This week’s loss in the trial in Los Angeles – coupled with the looming, similar lawsuits – has raised the idea of a potential mass settlement. TikTok and Snap, which were named as defendants in the California lawsuit, settled with the plaintiff before the trial started, but remain defendants in the other cases. An early loss could motivate the companies to consider a blanket settlement to avoid a drawn out and expensive legal fight.

That might not happen right away, though, said Matthew Schettenhelm, a litigation and government analyst at Bloomberg Intelligence. Wednesday’s $6 million verdict was small for a group of companies collectively worth several trillion dollars, and the social platforms may believe they just faced their toughest opponent. Since this was the first case the plaintiffs brought forward out of thousands of potential options, Schettenhelm said it’s likely stronger than the other cases waiting in the wings.

“I wouldn’t view it as the norm of all those thousands of cases, it’s probably an exceptionally strong case,” he said.

Still, Schettenhelm acknowledged that the longer these cases drag out, the more these companies will see headlines linking them to addiction and child safety failures. Even if they believe they may ultimately prevail in some of the cases, there will be a reputational cost that comes along with the fight.

“There’s likely going to be this ongoing assault of headlines on this issue,” Schettenhelm said. “That’s not great for building the business going forward, and it’s not great for the case that they’re making in Congress to fight against legislation aimed at protecting kids.”

--With assistance from Maia Spoto.

To contact the reporters on this story:
Kurt Wagner in San Francisco at kwagner71@bloomberg.net;
Alexandra S. Levine in New York at alevine136@bloomberg.net

To contact the editors responsible for this story:
Sarah Frier at sfrier1@bloomberg.net

Andrew Pollack, Peter Blumberg

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