Meta, Google, TikTok and Snap will have to continue to face thousands of lawsuits concerning the allegedly addictive nature of their platforms. The US Court of Appeals for the 9th Circuit has rejected an attempt to halt more than 3,000 cases, ruling that the appeal by Meta and TikTok was premature.
This is an important caveat: the court has not ruled that the companies are liable for damages, nor that they cannot invoke Section 230 of US law, which protects platforms from certain claims relating to user-generated content. However, it ruled that, at this stage, this provision constitutes a defence against liability rather than automatic protection against the lawsuit itself.
For the industry, this primarily means further legal costs and the risk of product design data being disclosed during internal proceedings. Financial pressure is also mounting. A few days earlier, a court in New Mexico ordered Meta to allocate $567 million to initiatives relating to young people’s mental health. Together with an earlier fine, the total value of the rulings in this case amounts to $942 million. Meta has announced that it will appeal.
Furthermore, on 12 August, jury selection begins in the federal trial against Meta concerning, amongst other things, child protection and the design of Facebook and Instagram.
The dispute is part of a broader shift in attitudes towards technology. In July, the European Commission provisionally concluded that features such as infinite scroll, autoplay and highly personalised recommendations on Facebook and Instagram may breach the Digital Services Act (DSA).
If this trend continues, platforms may be forced to overhaul features designed to boost engagement, particularly on accounts held by minors. This, in turn, could increase compliance costs and reduce the time spent on the apps, and thus also a portion of advertising space. However, the scale of the financial impact remains difficult to estimate at this stage.
