Meta shares fell 6% to a 10-month low on Thursday after rulings this week found the Facebook parent failed to adequately warn or protect young users, stoking concerns about billions of dollars in fines from new cases and follow-on litigation.
ATLANTA — Meta shares fell 6% to a 10-month low on Thursday after rulings this week found the Facebook parent failed to adequately warn or protect young users, stoking concerns about billions of dollars in fines from new cases and follow-on litigation.
Jurors in the first two U.S. trials from a wave of lawsuits accusing social media companies of harming children have found Meta liable, a development that could set up an appeals fight challenging long-standing legal protections for tech firms.A Los Angeles jury found Meta and Google liable on Wednesday for a young woman's depression linked to alleged addiction to Instagram and YouTube, awarding $6 million in damages. In a separate New Mexico case, jurors ordered Meta to pay $375 million for misleading users about the safety of its platforms for children and enabling their exploitation."The verdicts add a new layer of risk on top of existing concerns about AI capex intensity, competitive pressure from TikTok and others, and the durability of ad growth, so they act as a catalyst for some profit-taking rather than the sole cause," said Adam Sarhan, chief executive of 50 Park Investments.Snap and TikTok were also defendants in the California trial. Both settled with the plaintiff before it began.Meta, Google, Snap and TikTok-parent ByteDance are facing thousands of lawsuits alleging their social media platforms have harmed the mental health of teens and young users.More than 2,400 such cases have been centralized before a single judge in the California federal court, while thousands of cases are consolidated in the California state court."For Snap, which is a much smaller company, I think this just increases the stakes for them if they have many more cases to come," said Glenn Cohen, a professor at Harvard Law School.Snap shares dropped about 6%, while Google-parent Alphabet was down 2.2%.
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