As redes sociais viciam? A Meta no banco dos réus

Meta is once again in the dock, this time facing a lawsuit from 29 American states that could cost the social media giant billions of dollars, possibly exceeding $1 trillion. The case alleges that Meta's business model revolves around "hooking the user, keeping them engaged for as long as possible, collecting their data, and then hiding the truth."

The lawsuit accuses the company of designing algorithms to create compulsive users of Instagram and Facebook, with the goal of generating long-term profits. California's Assistant District Attorney Megan O'Neill stated that the strategy aims to target younger users to maximize future profits. The trial is the culmination of a joint action initiated by the 29 states, originally filed in 2023.

Meta claims that the prosecutors are seeking a penalty of up to $1.4 trillion, a figure the company considers "grossly disproportionate." The states, however, assert that $200 billion is a more likely outcome for the damages. The lawsuit alleges that Meta encouraged "addictive" behaviors and provided misleading information about the safety of its products, contributing to a national crisis of mental health among young people.

The trial is taking place in the Northern District of California, in Oakland, with four states leading the case: California, Colorado, Kentucky, and New Jersey. Meta has denied the allegations and argued that the prosecutors are demanding "illogical" changes to the design of its platforms. The company claims that its safety measures include Instagram Teens for users aged 13 to 17, which makes all data private by default and restricts strangers from sending direct messages.

According to Bloomberg, lawyer Paul Schmidt told the jurors that the company has adopted safety tools and finances research on adolescent mental health. "I believe there will be no challenge to the facts that these tools help people and that Meta continues to work on improving them," Schmidt said. The lawsuit alleges that the company collected data from users under 13, a violation of a federal law, the Children’s Online Privacy Protection Act.

This infraction could result in a fine of up to $20,000 per case, which could amount to $1.4 trillion based on Meta's calculations for the millions of users on its platforms. The prosecutors have not disclosed an estimated value, but O'Neill estimated the amount to be around $193 billion during a preliminary hearing last week. Even the lower estimate would rank among the largest judicial settlements in history, compared to the $206 billion settlement with the tobacco industry nearly three decades ago due to cigarette addiction.

The prosecutors emphasized that the case is not about the content, but rather the design of the platforms. Social media companies often rely on Section 230 of the Communications Decency Act for immunity from liability for content posted on their platforms. "We are not here to hold Meta responsible for the presence of malicious people who post things that can harm children," O'Neill stated.

"What you will see throughout this trial is that we are holding Meta accountable for its own conduct." California's Attorney General Rob Bonta emphasized that the trial revolves around civil penalties, restitution, and distortion, rather than seeking the money as the primary goal. "We are not asking for $1.4 trillion," Bonta said.

The trial is expected to last between six and eight weeks. The New York Times, inspired by the judicial war against the tobacco industry in the 1990s, describes Meta as the largest target of such actions, with judicial pressure already impacting its bottom line. In the second quarter, Meta disbursed $2 billion in legal expenses, resulting in a net loss of $18 billion for the period.

Meanwhile, several countries have banned children and adolescents under 16 from using social media, including Australia, France, Germany, India, Indonesia, and Malaysia. The European Union is also studying the possibility of banning this age group in all 27 member states. In the United States, no ban has been implemented, but Congress is debating new legislation to protect children, the Kids Online Safety Act.

Several states have already passed their own laws addressing the issue. The California case could add pressure to Meta's valuation, with analysts from Gordon Haskett Research Advisors stating that they do not expect the judge to award an indemnity near the $1.4 trillion figure. However, Meta could face a hefty fine or judicial measures requiring changes in its business practices if an agreement is not reached in the case.