Major Tech Verdicts Serve to Check Industry as Regulation Stalls

Jury verdicts against technology juggernauts like Meta Platforms Inc. and Uber Technologies Inc. are spotlighting the role complex litigation plays in shaping tech policy in the absence of comprehensive legislation.

Bellwether trial losses and settlements in cases over social media and ride-share platform safety have become important pressure points in creating substantive design limits.

Without comprehensive federal legislation regulating online platforms’ design, state attorneys general and private plaintiffs are turning to litigation. As lawsuits pile up and get consolidated, early jury verdicts are influencing corporate behavior, and settlements are effectuating safety changes.

Consolidated litigation “can sometimes become a little bit like a junior varsity Congress when you look at the different types of players who are often bringing these kinds of lawsuits,” said Adam Zimmerman, a law professor at USC Gould School of Law.

It can “bring together people and institutions in every different layer of government for the purpose of trying to address a discrete issue that affects our society, and there’s no bigger issue right now than how we regulate our platforms,” he said.

States have increased efforts to regulate platform design and chatbots, and “there’s this feeling that the legislation at the federal level is just not driving anything right now,” said Allison Fitzpatrick, a partner at Davis+Gilbert LLP. “So the states and plaintiff advocacy groups have to take matters into their own hands and they could drive it by litigation.”

Settlements in complex litigation “can get the same kinds of policy changes” and aren’t “subject to a litigation challenge because they are agreements with the companies,” said Megan Iorio, senior counsel at Electronic Privacy Information Center.

Discovery Pressure

“We’ve historically not had as big a regulatory footprint as our peers in Europe, and what has typically filled the gap in our regulatory state has been our litigation state,” Zimmerman said.

There’s “a long line of cases” that “explain the moment we’re in"—like the public health litigation around cigarettes, opioids, and vaping, all of which resulted in massive multi-billion dollar settlements and, in some cases, marketing restrictions.

Those examples show “that when there is a crack in our regulatory regime,” especially related to public health, complex litigation can hold corporations accountable, or produce information necessary to understanding the social problems they created, Zimmerman said.

Internal company documents produced in discovery start to show the gap between what companies knew about potential harms and what they were discussing publicly, said Peter Chapman, an associate director at the Knight-Georgetown Institute.

They can show how the companies are experimenting and discussing “how they measure risk and ultimately define acceptable trade-offs between safety, engagement, and revenue,” Chapman said.

That information can galvanize settlements that look like legislation, and force lawmakers to respond, Zimmerman said.

Litigation Losses, Settlements

In a landmark test case in California state court in March, a jury found Meta and Google liable for negligently designing their platforms and failing to warn that they could be dangerous for kids. They, and other social media giants, settled similar claims brought by a school district in May.

In December, dozens of lawsuits alleging Roblox Corp. allowed child sexual predators to proliferate on the platform were consolidated in federal court. In a first-of-its kind deal with Nevada’s attorney general—soon followed by Alabama and West Virginia—Roblox agreed in April to institute age verification measures for all users and fund a law enforcement liaison position.

Following these developments, tech companies have already begun changing their platforms and promising stronger safety features.

Meta announced changes to its teen accounts earlier this month that it says are designed to help kids see age-appropriate content by default. The company said it also introduced stronger parental controls called “Limited Content.”

Snap Inc., which settled the claims against it in the social media addiction litigation before the first test trial, also announced changes this month for users under 16. They include an in-app family center that allows parents to see their kids’ friend lists, set content restrictions, and report potentially concerning accounts.

Rideshare company Uber also lost two federal bellwether cases alleging it failed to prevent drivers from sexually assaulting passengers. The thousands of cases in that litigation allege Uber knew about widespread driver sexual assault, but failed to implement safety features like dash cams or to match woman riders and drivers. In March, the company launched a feature allowing women to request women drivers.

Momentum Growing for Regulation

“Mass litigation is significant not just for the results it produces, but also for the reactions it can generate from our public institutions like Congress,” Zimmerman said. “I have every reason to believe that it would do that here.”

Zimmerman noted that emails and documents produced in the social media litigation have already played a role in legislative hearings.

Last month, the Senate Commerce Committee advanced a bill that would require technology companies to make their platforms safer for kids.

And courts facing wide-ranging questions about social media, chatbot, and technology harms can model remedies after those in the public health lawsuits, Chapman said.

His organization, along with Tech Justice Law and the USC Marshall Neely Center for Ethical Leadership and Decision Making, published a policy framework for crafting effective and enforceable remedies across three categories: harm prevention, harm mitigation, and governance.

“The growing body of social media and AI chatbot cases now moving through federal and state courts presents a critical opportunity to translate available research and evidence into durable and enforceable change,” the report said. “Well-designed remedies—paired with effective oversight and enforcement—are essential for improving safety online.”

Consolidated litigation has injected a new energy into the policy landscape, Iorio said.

It’s “creating momentum for regulation both among lawmakers and the public,” she said. “The information that’s coming out through discovery is creating a broader awareness among the public and among lawmakers that these companies know what they’re doing and we need to do something to stop them.”