Meta must face claims that it misled the public about its platforms' risks to children

SAN FRANCISCO (CN) — A federal judge ruled Monday afternoon that Meta must face claims from shareholders who claim that the company lied in statements about the harms, especially to children, that flow from its various social media platforms.

Siding primarily with the claims relating to the impact of Instagram on children by the Ohio Public Employees Retirement System — Ohio’s largest public employee pension fund — U.S. District Judge Araceli Martinez-Olguin found the plaintiffs had sufficiently shown statements made by Meta officials were false or misleading.

In a 33-page ruling Monday afternoon, the Joe Biden appointee noted that Instagram’s head, Adam Mosseri, made statements that Instagram’s mental health impacts on teenage girls was “bi-directional,” meaning that use of the app had both small positive and negative effects.

“Given the extensive internal research that plaintiffs cite showing the harm that Instagram causes to teenagers, they have sufficiently alleged that stating that research findings are ‘bi-directional’ was false or misleading. Similarly, stating that the research showed that teenage girls said Instagram was helping their mental health was misleading given Meta’s extensive internal research contradicting this assertion,” Martinez-Olguin wrote.

Meta had argued that internal research about Instagram does not evidence that Mosseri’s and other senior Meta leaders’ statements about the app’s impact on children were false.

“However, plaintiffs allege that at the time these statements were made, Meta had already concluded that its proposed measures did not improve well-being but that touting them ‘could make them look good.’ Accordingly, plaintiffs sufficiently alleged that these statements are misleading, and defendants have not met their burden of showing that claims based on these statements should be dismissed,” Martinez-Olguin wrote.

The fund had challenged 17 statements made by Meta’s leaders about Instagram’s impacts on young users. In those statements,  Meta said that there is little research on Instagram’s impact on children, Instagram’s impact on the mental health of teens is bi-directional, social media is not inherently bad for teens and children and Meta is committed to protecting child safety.

The plaintiffs also claimed that Meta amplified harmful content by design and that Meta’s content moderation tools did not do enough to remove harmful content. It relied on a series of reports by the Wall Street Journal, which quoted internal Meta reports or memos from 2017-2019 that concluded the Facebook algorithm had a side effect of causing harmful content to proliferate.

However, Martinez-Olguin tossed those claims, writing that the claims were missing adequate corroborating details, such as who wrote the internal Meta reports or what content they contained.

“Even if the court were to consider the reports, plaintiffs offer no factual allegations that contradict Meta’s statements that it was taking significant steps to fight misinformation, that Meta removes misinformation from its platforms, or that Meta’s investment in artificial intelligence makes its spam detection more effective,” Martinez-Olguin wrote. “Additionally, the conclusion in the reports that the algorithm had negative side effects does not contradict defendants’ assertion that they work to reduce misinformation or extremist content on their apps, had reduced such content, or that it is not in their interest to push users toward such content.”

Meta’ conduct was revealed in October 2021 when the Wall Street Journal published a series of articles based on information from Meta whistleblower Frances Haugen. Haugen told the Journal that that Meta’s own analyses showed significant mental-health issues stemming from the use of Instagram among teenage girls, such as suicidal thoughts and eating disorders.

The Wall Street Journal articles prompted the 2021 lawsuit where the plaintiffs accused of hiding findings about how the company has managed its algorithms and the lack of protection for minor users, as well as how the social media giant’s algorithms handled divisive, violent and polarizing content,

The plaintiffs claimed that Meta’s statements were false because Haugen told the Wall Street Journal that Meta conducted internal research over several years that found Instagram “makes teens feel very bad,” and that Meta’s research concluded that negative effects of Instagram on teens were “common” and “severe,” and made body image worse for 1 in 3 teenage girls, and that 14% of boys in the U.S. reported that Instagram made them feel worse about themselves.

The shareholders claim that after these facts went public, market losses caused investors such as the pension fund to lose more than $100 billion in total.

Lawyers representing the plaintiffs did not reply to requests for comment before the deadline. Meta’ lead attorney and Meta media relations also did not respond to requests for comment.