Meta has been ordered to pay $US375 million after a court in the US found the social media player liable for misleading consumers about the safety of its platforms and endangering children.
Analysts said the ruling, if it forces the platforms to change, could impact not only usage but also advertisers who spend billions of dollars to reach social users.
The social media platform was ordered to pay $5,000 for each violation, the maximum penalty New Mexico’s Unfair Practices Act.
Meta, the second largest digital advertising platform in the world behind Google, disagrees with the verdict and will appeal.
“We work hard to keep people safe on our platforms and are clear about the challenges of identifying and removing bad actors or harmful content,” said Meta.
The court was told Meta employees and child safety experts had repeatedly warned about risks.
“The jury’s verdict is a historic victory for every child and family who has paid the price for Meta’s choice to put profits over kids’ safety,” said Raúl Torrez, New Mexico’s attorney general who brought the lawsuit
“Meta executives knew their products harmed children, disregarded warnings from their own employees, and lied to the public about what they knew.
“Today the jury joined families, educators, and child safety experts in saying enough is enough.”
The verdict was a significant blow to social networks who are already under the microscope from parents, lawmakers, and educators, according to eMarketer analyst Minda Smiley.
“For years, social media companies have claimed they’re hard at work making their platforms safer for kids and teenagers,” Smiley said.
“Critics have long been sceptical that they’re acting in good faith—or that their efforts are having a material impact.
“This verdict could mark the start of a difficult new chapter for social platforms, one where the rules they write for themselves no longer cut it.
“If these companies end up changing how their platforms are designed and function, this will impact not only usage, but also advertisers who spend billions of dollars to reach social users.”
New Mexico said the substantial damages the jury ordered Meta to pay should send a clear message to big tech executives that no company is beyond the reach of the law.
“Policymakers and law enforcement officials across the country can help make this verdict a turning point in the fight for children’s safety,” said New Mexico’s Torrez.
“This is a watershed moment for every parent concerned about what could happen to their kids when they go online – and this victory belongs to them.”
By next year, advertisers will spend more than $100 billion on Meta alone in the US, almost a quarter of all digital ad spending, according to forecasts.
“It’s become increasingly clear that it will only get more difficult for these companies to maintain business as usual as concerns grow louder and scrutiny intensifies,” said eMarketer’s Smiley.
“Lawmakers at both the state and federal levels have been busy trying to regulate social media usage among kids and teens.
“They’ve run into plenty of roadblocks along the way, one of which is Big Tech lobbying. Still, momentum continues building, and this verdict stands to further embolden their agendas.
“And none of this is happening in a silo. Social media companies are already contending with broader challenges related to usage of their platforms.
“Time spent with social networks among US users is plateauing after years of reliable growth, meaning they have to work harder to keep users around.
“And many users, particularly younger ones, are trying to cut back how much time they spend on social media."
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