00:00Four U.S. states are taking Meta to court, accusing the tech giant of deliberately making Facebook and Instagram addictive
00:07for children.
00:08California, Colorado, Kentucky and New Jersey are seeking billions of dollars in damages as well as changes to the platforms.
00:17The landmark trial begins on Wednesday in California, with the states also accusing Meta of collecting data from children under
00:2513 without parental consents.
00:29Well, Vincent Jolamon is the director of the Life Sciences Law and Policy Center at UC Berkeley.
00:36Thanks so much for coming on the program.
00:38So is this a flashpoint for the social media industry?
00:43Absolutely. This is one of many trials.
00:47There were already two trials earlier on this year, one in the state of New Mexico, where their attorney general
00:52sued and got close to a billion dollars in settlement.
00:55Another with one person, the first of what is going to potentially be thousands of individual plaintiffs.
01:01And that person got six million dollars.
01:03This is a separate trial similar to what New Mexico had tried.
01:07And Meta has tied the potential damages at one point four trillion dollars.
01:13So this could be a huge deal.
01:15I know you've compared this to the tobacco lawsuits of the 1990s.
01:20What are the similarities?
01:23In the United States, we're very concerned with information asymmetries.
01:28So you can generally sell people and sell the public things that are quite dangerous, so long as the public
01:35knows that those things are dangerous.
01:36But one of the things that came up with the tobacco industry was that the tobacco industry knew something about
01:42tobacco,
01:43knew that it was more dangerous and more addictive than the public knew.
01:46And they withheld that information and their public communications were quite different.
01:50That same argument is being used right now for Meta, saying Meta knew potential harms, especially harms to minors, but
01:56did not communicate those to the market.
01:59And that information asymmetry is kind of a key element of what is that trial here this week.
02:07And something that big tech might say is that, you know, parents are abdicating responsibility here.
02:13You know, is it unrealistic to expect them to, these tech giants, to police platforms designed to keep children engaged?
02:22I think it's a really, it'll be a really meaningful argument for Meta to make.
02:26On one side, they certainly have designed their platforms to be engaging.
02:32It's a way to keep people on and a way for them to make more money.
02:35The question is, did they cross some sort of threshold that is unacceptable to the public?
02:41One important argument that Meta's going to bring up is, sure, there are some people on the far end of
02:46the bell curve
02:46that are using these way too much and have all these problematic effects.
02:50But in shutting down access for those people, would we also preclude a lot of really beneficial elements of these
02:58social media tools?
02:59Social media can be a really helpful outlet for a lot of teens, especially those in relatively isolated environments
03:05or relatively kind of regressive environments for themselves.
03:09These can be positive outlets.
03:11So I think it'll be interesting to see whether or not Meta can kind of grind that crack.
03:15Now, if Meta loses, could this force a fundamental change in the way the company does business in the way
03:23other tech giants do business?
03:26Totally.
03:27So one thing is the potential damages, but also what could happen in American courts is what we call an
03:32injunction,
03:33where a court could force the company to change something about the way that they operate,
03:38whether maybe they won't be able to have infinite school anymore,
03:41or maybe it'll be much harder for young people to access these platforms.
03:46And by the way, Meta's the only remaining defendant on this trial,
03:50but originally there was Snapchat and TikTok and YouTube.
03:54And they had settled, but there's still many open cases against those other ones.
03:59And I think if there was a big judgment against Meta, we're going to see big actions against those other
04:03three as well.
04:05Vincent, do you think that this case could change the economics of the social media business?
04:11Absolutely.
04:12If anyone pulls up Meta's stock over the past week, it's down close to 10%.
04:18This is, I think the market's seen this as a huge response.
04:22And something to keep in mind is Meta is fighting two big battles.
04:25One with potentially $1.4 trillion in liability in court, but the other in the court of public opinion.
04:30And people, this is going to be all over the news for the next several weeks.
04:34And I think a lot of adults are going to watch this and say, well, maybe Meta knows some dangerous
04:39things about this,
04:40and maybe I don't want to use this.
04:41But more importantly, they're going to say, maybe I don't want my children to be using these apps.
04:45The winning thing is really important.
04:45So far, I think the most painful thing is, I think, I think about it.
04:45I think the most painful thing is, you know, no, no, no, no, no, no, no, no.
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