Meta Platforms Inc. (NASDAQ:META) suffered a significant legal setback after a federal judge allowed most claims in a lawsuit brought by 29 state attorneys general over the alleged addictive design of Facebook and Instagram to proceed.
Judge Allows Key Claims Against Meta to Move Forward
On Monday, U.S. District Judge Yvonne Gonzalez Rogers denied Meta’s request to dismiss claims accusing the company of deceiving the public, engaging in unfair business practices and violating the federal Children’s Online Privacy Protection Act, or COPPA, Reuters reported.
The judge also granted summary judgment to the states on a key COPPA issue, finding that Meta failed to comply with the law’s notice and parental consent requirements.
The ruling means that the specific issue will not need to be decided by a jury.
The lawsuit, filed by attorneys general from 29 states, alleges Meta intentionally designed Facebook and Instagram to encourage compulsive use among children and teenagers while concealing the platforms’ potential mental health risks.
Meta Disputes Allegations of Social Media Addiction
Meta pushed back against the claims, saying it remains committed to protecting young users.
“We strongly disagree with these allegations and are confident the evidence will show our longstanding commitment to supporting young people,” a Meta spokesperson said in a statement.
The company argued the attorneys general lacked evidence that it misled consumers about whether its platforms are addictive.
Meta also contended that “social media addiction” is not a recognized psychiatric condition and maintained that Facebook and Instagram are designed for a general audience rather than children under 13.
Meta did not immediately respond to Benzinga’s request for comments.
Judge Says Jury Should Decide Key Factual Disputes
In her 38-page ruling, Gonzalez Rogers said there are factual disputes that should be resolved at trial, including whether Meta’s platforms were designed to promote compulsive use and whether the company’s public statements about those designs were misleading.
“The AGs present a reasonable interpretation of [Meta’s] statements that Facebook and Instagram are not designed in ways that cause teens to compulsively use the platforms to their detriment,” the judge wrote.
California Attorney General Rob Bonta called the decision a “critical win” in efforts to hold Meta accountable for what he described as a youth mental health crisis.
A trial involving claims from California, Colorado, Kentucky and New Jersey is scheduled to begin Aug. 18.
Price Action: Meta shares closed Tuesday up 0.12% at $563.29 and slipped 0.22% to $562.05 in after-hours trading, according to Benzinga Pro.
According to Benzinga Edge Rankings, Meta ranks in the 88th percentile for growth, though its stock has posted negative returns over the short, medium and long term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: FotoField on Shutterstock.com
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