Chapter 1: What was the jury's verdict against Meta and Google regarding social media addiction?
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Chapter 2: How did the trial address the design of social media platforms?
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Yeah, this is difficult and worth some analysis. So two of the big movers to the downside within the technology sector are Alphabet, the parent of Google, and Meta. Meta having its worst day since the end of October, October of 2025 last year. The morning started with Mag7 under pressure because of the belief by the market that the war in Iran will be prolonged. But there was a big piece of news.
in the last 24 hours, a jury verdict, finding Meta and Google liable for harming a young social media user with products that the court decided were deliberately or negligently designed to be addictive. This was the first social media addiction trial. Let's bring in Bloomberg's legal reporter, Madeleine Meckelberg, who was in the courtroom for that verdict.
And let's start with the very basics, the jury decision. what that decision was based on, predicated on, and we'll go from there. Madeline.
Right. So a jury in Los Angeles spent about nine days deliberating on evidence that they heard over a roughly four-week trial.
They heard from people including Meta CEO Mark Zuckerberg, Instagram head Adam Mosseri.
But then they also heard from people within the life of this young woman who brought the suit, who were able to speak about the harms and suffering that she experienced as a result of using these platforms.
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Chapter 3: What evidence did the jury consider in the social media addiction case?
But these cases, as you mentioned, are about this claim, this central idea that these companies knowingly and intentionally designed their platforms to be addictive and should have known that they would cause harm to young users.
Therein lies the crux, Madeline, because before the arguments have been about the content from which in many ways they are shielded. But this is about how we are served said content more broadly. What is it that is deemed to be harmful? And are we already expecting the business model changes are going to be interpreted from this? Because things have changed.
Companies have responded to a certain extent, but they were deemed in many ways negligent because there weren't warnings to younger people. Right.
That's why you've heard this case be referred to as a landmark case, because this really is a novel legal theory. As you know, these companies have been shielded from immunity from suits alleging harm by users due to content on their platform. But this is about the design. So jurors heard a lot about the algorithm itself, and then they heard a lot about features that these companies use to...
that they had experts come in to say are designed to be addictive. They called it addiction by design. That's being peppered with notifications, that endless scroll, being able to pick up your phone and scroll through the social media feeds and not really reach an end of content. It's about videos that automatically play once you finish watching one.
And so they say that all these features cumulatively are designed to hook you and keep you on the platform as long as possible, and that children are particularly susceptible to those kind of features. We just showed statements on the screen, but in summary, both companies disagree with the verdict. Meta is looking at its legal options. Google plans to appeal.
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Chapter 4: What implications does this verdict have for future legal cases?
And as we said at the start of the segment, both stocks are under pressure. Later in the show, we'll get into the kind of business and what side and why the stock's under pressure. But you set out what happened, Bloomberg's Madeleine Mekelberg, who was in the courtroom in Los Angeles. Thank you.
Joining us now with more on the implications of the case is Eric Goldman, Associate Dean for Research at Santa Clara University School of Law. And Eric, you've joined us throughout this process. We now have a jury verdict. I think to start, just your response to the outcome of this specific case.
The whole point of the jury trial is that we needed an answer from average Americans about how they viewed the culpability of social media services. And we got an answer. It's an answer that I think the defendants don't like. The plaintiffs, I think, are happy with it. But it's just one answer of what is expected to be multiple answers coming from additional trials.
Again, the companies do not agree with the outcome. Google plans to appeal. We know Meta is looking at its options. One of the things that you're cited as looking at is the level of damages awarded in this specific case. And I think we discussed in prior conversations the context that there are other legal proceedings going alongside this in parallel with this case.
But why focusing on the damages? Why is that important?
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Chapter 5: How are Meta and Google responding to the jury's decision?
It allows the parties to start to estimate how much money are we even talking about. And until we got a data point like the jury verdict, really the parties couldn't even imagine any agreement. They were so far apart. Now we can start to quantify the numbers. If there's 3,000 plaintiffs that are currently pending, we're talking about roughly close to $20 billion.
Now, those are numbers that are huge, and yet there are numbers that Google and Meta might think that they can afford. So now that we know how much money might be in play, there's new grounds for discussions about settlement.
It's not just the consumer protection angle, though, but there's also the public schools, there's estates, Eric. But I want to go to what happened earlier in the week on Tuesday in New Mexico, because actually a much larger sum of money was being demanded of META after it was deemed not to have protected teenagers in that particular state when it came to sexual predators.
Now, can you weave in that particular legal strike on META and what that means more broadly in this context?
Yeah, it's a reinforcement that, again, a different jury was asked essentially the same set of questions. How responsible are social media for the harms that their users suffer? And the jury came back with functionally the same answer. Now, in that case... they were limited in terms of how many damages they could assign to any particular victim.
So we don't really know how that number might have looked if a different set of legal theories were used. But it is the sign that we have two juries saying we will impose substantial damages on social media. Those are two really key data points.
And Eric, of course, as we've mentioned, both companies disagree. And Google is coming out strongly saying you misinterpret our very business model.
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Chapter 6: What changes might social media companies face in their business models?
YouTube is not a social media platform. It's a streaming platform. Whereas Metro is looking at its own platform.
arguments but more broadly its argument has been there is so much more to mental health than one particular platform one particular app and they actually had some evidence from various doctors showing that in some ways certain of these social media platforms offered positive narratives to the it was indeed a woman called kaylee we understand who brought up the particular court case in this hearing eric what do you make of those arguments
I think that we're so easy to focus on the parties in the courtroom. We have Kayleigh, the victim, and telling her story, and we've got the social media services telling their story. But there's a whole bunch of other individuals who are affected by the discussions taking place in that courtroom.
There are many users who benefit extensively from social media, who make it an integral part of their day and often the best part of their day. And if there were any changes to social media, either due to the financial pressure or due to legal compulsion, those benefits for those other users might reduce or go away. And none of that was really relevant to the trial.
And as a result, there's a lot of people who are going to be affected by these cases who don't even have a voice in the proceedings.
Well said, Eric Goldman. Appreciate you coming on Santa Clara University School of Law. Really deep dive there. Now coming up, we've got more on the wider market implications for tech after the landmark social media addiction verdict against Meta and Google. From New York and San Francisco, this is Bloomberg Tech.
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Chapter 7: How does this case compare to historical cases like those against big tobacco?
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Chapter 8: What broader trends in social media usage are emerging from these legal challenges?
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We're looking at Meta and Google. Meta in particularly on track for its worst day since October.
The summary of the sell side is that there is going to be an overhang on this name, a headwind, a risk relating to social media addiction because the landmark jury verdict holding Google and Meta liable for harming a young user is being compared to the groundbreaking cases that force changes for big tobacco. That could have an impact on social media firms, advertising, businesses.
Let's get out to Bloomberg's Kurt Wagner. who leads our coverage of social media as an industry. This is what you've been writing about, that Meta and Google risk a big tobacco-like response because of the outcome of yesterday's trial. What's the reporting telling us?
yeah well you know the jury found that these products can be addictive right you think of other consumer products over the years that have been found to be addicted big tobacco is probably top of that list and you see the tarnish on an industry like that and you have to sort of think is this the same kind of thing that's going to be happening to the social media platforms you know Eric was just talking with you guys in the last segment about the fact that there are thousands of other cases looming with similar arguments this is just
just the first, obviously each case is different, but if you sort of look at what's happened this week between New Mexico and the trial in LA and say, okay, juries are buying this argument, juries are believing that these companies and platforms are responsible, and you extrapolate that out thousands of times over the next couple years, you suddenly are looking at a very different industry with a very different reputation.
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