How Serious Are Thousands of Addiction Lawsuits for Meta (META) and Snap (SNAP)?

A federal appeals court has removed a procedural obstacle for over 3,000 lawsuits accusing Meta Platforms, Snap, Alphabet, and TikTok of creating addictive features in their products that harm young users. The court ruled that Section 230 provides a defense against liability, not immunity from lawsuits, making the companies' appeals premature.

The Ninth Circuit's decision narrows the litigation, as some feature-related claims are barred, while others proceed. The companies can continue challenging remaining claims and seek appellate review after final judgments. Plaintiffs must still connect specific platform features to individual injuries, which could be challenging due to the diversity of users, usage histories, mental health conditions, family circumstances, and exposure to multiple platforms.

Meta and Google are also challenging a verdict in California, where a woman received $6 million in damages, with the company assigned $4.2 million. The verdict may influence future settlements, but it doesn't set a standard recovery across the broader litigation. Courts have resisted extreme remedies requested by plaintiffs, such as mandating algorithm changes.

The litigation can continue without all product-design claims surviving or every requested restriction becoming enforceable. Meta and Snap face thousands of lawsuits, with additional California state cases totaling approximately 3,300. The companies can narrow the cases before significant financial scenarios become realistic. Plaintiffs allege that features like autoplay, infinite scrolling, notifications, and recommendation systems are designed to keep young users engaged without proper safeguards.

Courts have allowed enough of these claims to proceed through discovery and into trials. The New Mexico case shows that states may seek both monetary relief and changes to platform operations. A $942 million combined penalty and funding order was imposed, with Meta planning to appeal. The litigation's scale creates legal expenses, discovery burdens, reputational risks, and pressure to negotiate broader settlements.

The New Mexico order imposes five years of youth-safety measures. A trial involving 29 state attorneys general is scheduled, addressing claims under the Children's Online Privacy Protection Act and state consumer-protection claims.