Meta’s business model under scrutiny in landmark trial

Meta's business model under scrutiny in landmark trial

Meta's business model under scrutiny in landmark trial

Story Highlight

– Meta accused of designing addictive products for children.
– Trial initiated by California and 28 other states.
– Potential damages could reach $200 billion for Meta.
– Witness claims Meta ignores child safety concerns.
– Meta denies allegations and defends its safety measures.

Full Story

Meta, the parent company of Facebook and Instagram, is facing serious allegations as a significant trial gets underway in Oakland, California. The proceedings, which began this week, focus on claims that the company has developed addictive products that are detrimental to children. The state of California has joined 28 other states in a lawsuit against the tech giant, accusing it of violating federal child privacy laws and state consumer protection regulations by gathering data from users under the age of 13 without obtaining consent from their parents.

Megan O’Neill, representing California, characterized Meta’s operations using four words: “hook, hold, harvest, hide.” She stated that these tactics particularly impact younger users, who are “hooked” into the platform, kept engaged for extended periods, and have their data “harvested,” while the truth about these processes is allegedly obscured from the public.

The trial could have significant implications for Meta, with potential damages peaking at $200 billion, a sum that rivals the company’s projected annual revenue for 2025. The lawsuit also seeks to enforce changes in how Meta’s products are designed, aiming to enhance safety for younger audiences and potentially transforming the company’s business strategy.

Meta has categorically denied all allegations. Liza Crenshaw, a spokesperson for the company, countered that state officials are pursuing what she described as an “outlandish payout” rather than adhering to factual or legal accuracy. Paul Schmidt, another attorney for Meta, acknowledged that social media poses challenges for some individuals, but insisted that the company has developed tools to mitigate these issues. He emphasized that children under 13 are prohibited from creating accounts and noted that over one million such accounts have been terminated.

The trial is set to unfold over the next six to eight weeks, during which jurors will receive insights from former Meta employees and medical experts, including testimonies from the company’s CEO Mark Zuckerberg and Instagram’s CEO Adam Mosseri. The jury serves only in an advisory capacity, providing recommendations to Judge Yvonne Gonzalez Rogers, who will make the ultimate decision regarding the verdict and any potential penalties.

This case is not isolated; Meta is currently embroiled in thousands of similar lawsuits from families and other states. The company has recently lost two previous trials, resulting in a nearly $1 billion judgment for allowing child sexual exploitation and over $4 million in damages connected to the design of addictive products.

Among those giving evidence in the trial is Arturo Béjar, a former safety engineer at Meta who testified about the issues children face on Instagram. His motivations stem from personal experiences involving his daughter, who encountered distressing interactions on the platform. Béjar remarked, “Meta is taking a ‘don’t ask, don’t tell’ strategy” regarding child safety, highlighting the challenges users face when reporting abuses.

He recounted his communications with Zuckerberg, providing him with troubling survey results about teen experiences on Instagram. Despite sending this information in hopes of prioritizing the matter, Béjar received no response from Zuckerberg.

Following Béjar, the jury also heard from former Meta user experience researchers and a psychology professor who is scheduled to continue providing testimony next week.