Most Controversial Lawsuit on the Internet Right Now

Kind: captions Language: en Meta was facing a $1.4 trillion extinction event until they paid to make it go away. For years, Mark Zuckerberg and his inner circle [music] thought they were untouchable. They'd engineered the like button to exploit children, trading safety for aggressive platform growth. They thought Meta was too [music] big, too wealthy, and too powerful to fail. They were wrong. A legal loophole threatened to bring Zuckerberg's social media empire crashing down. A loophole that could delete the like button forever, and Meta's high-priced lawyers were scrambling because they had no idea how to stop it. The panic spreading through the Meta offices was all down to a 30-year-old law, Section 230. Passed back in 1996, this single legislation helped lay the foundations of the internet as we know it today. Essentially, the law states that if [music] someone posts a defamatory comment or engages in hate speech on Facebook or other platforms, they are responsible, [music] not the social media platform. For decades, this was Meta's ultimate get-out-of-jail-free card. >> [music] >> Without this protection, social media sites couldn't exist. It's the reason companies like Meta grew [music] into trillion-dollar conglomerates, and they did it while ignoring the ethical nightmare brewing in the background. Section 230 was their shield, or at least that's how it seemed until 2021. That was when a group of state attorneys general, including California Attorney General Rob Bonta, found a crack in the shield. They already had a strong reason to believe that social media was dangerous for children. They believed that Meta knew that, and that made it even worse. But they didn't have the hard data. And then the Facebook files were leaked. Whistleblower and former Facebook product manager Frances Haugen exposed internal documents that proved Meta knew its platforms were toxic. They knew their sites were linked to a youth mental health crisis. Even as executives publicly denied the accusations, their own internal memos said otherwise. Now the attorneys had the evidence, but they still had a problem. Attacking the content on Facebook and Instagram was pointless. The moment a lawsuit targets posts or comments on these platforms, Meta's lawyers just have to point to section 230. The case would be dead on arrival. But what about the code? Don't go after the content, go after the architecture underneath it all. At that point, Meta wouldn't be able to hide behind section 230 anymore. The lawyers argued that features like the like button and infinite scrolling were explicitly engineered to hijack people's natural neurobiology. They claimed that these platforms were built to trigger stimulating rushes, forcing comp ulsive behavior. Meta hadn't built a social media network, they had created a digital slot machine to hook children. Meta had served up seriously flawed products and no warnings of the kinds of negative effects they might cause. And the word products was intentional. That meant the prosecutors didn't have to worry about section 230. They weren't taking aim at what the users were doing or saying on Facebook. They weren't arguing for censorship or for Facebook's bosses to ban certain users or delete certain posts. They were saying the platforms were hazardous to people's brain chemistry, and they had the evidence to back them up. Take the like button. On the surface, it looks simple. It's just a button that people use to express appreciation, a way to show that they found something interesting or entertaining. But there's much more to it. Studies show that every time social media users receive likes, their brains release a brief burst of dopamine. Known as the happy hormone or the pleasure molecule, this chemical is responsible for feelings of pleasure, motivation, and satisfaction. But it doesn't last long. Every hit is a very brief high, a tiny period of intense joy that quickly fades, [music] leaving people wanting more. Prosecutors argue it's one of the reasons why the like button was designed and deployed in the first place. It keeps people logging onto their Facebook feeds each day. It keeps them connected, engaged, and addicted to social media. They're always waiting for that next like to pop up, and the next dopamine release to hit them. Prosecutors have also pointed to other Meta-made features [music] as proof that the company's products were designed to prey on people's mental and emotional health, like variable rewards and reinforcements. Behavioral psychology studies in both animals and humans have found that unpredictable rewards tend to create the strongest [music] repetitive habits. Say you ask someone to complete a simple task over and over again, and you give them a treat as a reward for their actions. But instead [music] of dishing out treats on a fixed basis, like after every 10 tasks completed, you hand them out randomly. They might get one after doing [music] just two tasks and another after 12, and then after five, and so on. The subject knows they'll get a reward eventually, but there's no fixed [music] schedule. All they know is that if they complete their tasks, there's a chance they will be rewarded. As a result, they start working harder, completing tasks at a faster pace [music] in order to maximize their reward rate. The exact mechanism is used in slot machines. People [music] know that by pulling the lever it might lead to a reward. The machines are designed to pay out just enough on a random basis [music] to keep people pulling again and again. Prosecutors in the meta lawsuit have argued that Facebook and Instagram function in a similar way. When users open up the sites, their feeds and notifications often don't load up right away. Instead, there's a slight delay between opening the page and receiving the latest batch of likes and notifications. That tiny delay can create a sudden spike of dopamine as the user [music] anticipates what will happen next. Will I have any new notifications? Did someone like my last post? Did my picture get any comments? It's easy to see how it can become addictive. It's why so many social media users will refresh their feeds over and over, or check their phones on a regular basis. Then there's the infinite scroll. It's practically ubiquitous across social media sites [music] these days. From Facebook to Reddit, plenty of platforms now allow users to scroll endlessly, [music] seeing one fresh post after another. It didn't used to be that way. There was a time in the digital media landscape [music] where pages had fixed ends. You got to the bottom, and that was that. Your eyes were able to detach themselves from the screen, and your brain was able to take a break before the next batch of content came along. Meta tore up those foundations and built something [music] completely different. It popularized the concept of continuous social feeds. >> [music] >> The next set of posts were pre-loading before the user even had time to swipe down far enough. The result was a never-ending stream of content. And what happens when users can keep on scrolling and see more and more posts, pictures, and videos? They scroll far more than ever before. It's like the bottomless bowl study, which involved subjects eating soup from bowls that were subtly refilled as their contents were consumed. The study found that the people with these so-called bottomless bowls ended up eating over 70% more soup than those with regular ones. The visual cue telling them to stop, an empty bowl, never appeared. Critics of Facebook and similar social media sites argue that they employ the same idea. If you never let people see the end of their feed, they never stop scrolling. They're incentivized to keep going just that little bit further each time. If they don't, they might miss a post. It's FOMO, the fear of missing out. The prosecution claims that Meta made all of these features and systems integral parts of its platforms and then unleashed them onto some of the most vulnerable people in society, adolescents. As they progress through their formative teenage years, young people's brains and bodies are still developing. They're undergoing major physical and hormonal changes, coping with an increasingly complex array of challenges and responsibilities. They're more likely to experience mental health issues like anxiety and depression than other age groups because their brains are still growing and changing. They can struggle to cope with stress, anxiety, peer pressure, and conflict. These factors create a unique cognitive cocktail that puts teens at risk of not only using social media excessively, but being mentally affected [music] by it as well. Critics argue Meta was made to exploit that fact. Its engagement-based ranking algorithms were designed to drive dopamine [music] releases and maximize engagement. Data suggests the kind of content that keeps the average teen engaged is more often than not negative or harmful, like content related to social anxieties, eating disorders, and body dysmorphia. The more people engaged with this kind of content, the more the algorithm began to push it, and it reached the point where young users were starting to see their feeds filled with stress- or anxiety-inducing posts. Naturally, Meta's executives denied all of this for years, but in 2021, Frances Haugen's smoking gun was revealed in all its ugly glory. The former Meta product manager shared thousands of internal documents from Facebook servers with the news media and the wider world, and in doing so, she revealed just how much Meta really knew about the psychological impacts of its products. The leaks were damning. "We make body image issues worse for one in three teen girls," read a statement on one internal presentation. 32% of teen girls said that when they felt bad about their bodies, Instagram made them feel worse, revealed another. Meta's researchers also concluded that teens blame Instagram for increases in the rate of anxiety and depression. This reaction was unprompted and consistent across all groups. And it got worse. One study said that 17 and a half percent of girls suffered more with their eating disorders after spending time on the platform. Meta knew that its products were causing harm. It did nothing. In the eyes of parents, educators, and legal professionals, it was reckless. It was harmful, and it was wrong. But it didn't end there. Another whistleblower, Arturo Bejar, worked as a Meta engineer and also spoke out against the company. Testifying before Congress, he revealed that he had spent a year studying the harm that Facebook and Instagram had on teenagers. He emailed a report of his findings and recommendations for the next best steps to the company's bosses, including Mark Zuckerberg. Bejar states that he had never heard back from them. Meanwhile, as Meta's executives were creating their internal slideshows and classified research reports about teenage users, people in the real world were suffering. Data from 2009 revealed a worrying trend. When smartphones began to flood the teen market and algorithms pivoted to maximize [music] engagement, the US and other nations saw an explosion in mental health problems among the younger generations. Between 2009 and 2022, [music] ever-increasing numbers of teenage boys and girls also reported signs and symptoms of anxiety, depression, and even negative thoughts. Meta knew it was going on. It knew it was playing a part, and it didn't do enough to change that. That's what prosecutors based much of their opening arguments on when the company was officially placed on trial on August 18th, [music] 2026. It'd taken 3 years to get there, but now Meta was in the dock. Inside the Ronald V. Dellums Federal Building and US Courthouse in Oakland, California, the state's Deputy Attorney General Megan O'Neil issued her opening remarks. She pointed at the leaked documents [music] as proof that the company's own research teams had dug into how teenage minds work and what makes them addicted to social sites. Instead of acting on that information, the company's engineers exploited it for their own gain. They engineered features and platform improvements [music] to capitalize on teenagers' emotional insecurities and still developing brains. "The young ones are the best ones," read the header of one internal memo, which O'Neil shared with the court. It highlighted the malicious and insidious undercurrent flowing through the executive offices of one of the world's wealthiest companies. The prosecution is expected to argue that Meta's ultimate goal is getting users as invested and engaged as possible with the products. To do that, it's alleged the company not only created exploitative features, but it also violated the federal Children's Online Privacy Protection Act or COPPA. COPPA was made to keep children under the age of 13 [music] safe in an increasingly digital world. Internet platforms were forbidden from collecting personal data or building virtual profiles of younger users. The lawsuit states that even though Meta put a 13 plus age limit on its products, it knew that younger users were still accessing Instagram and Facebook, and it still collected personal information about them without parental consent. The evidence suggests that the company turned a blind eye to its swaths of underage users, allowing preteens to bypass its most basic of age gates, and used unlawfully obtained personal data to feed its insatiable algorithms. New Jersey Attorney General Jennifer Davenport told NPR, "They're putting the profits over the health of a generation of young people." Meta lawyer Paul Schmidt has countered that Meta has and continues to take steps [music] to improve the safety and design of its platforms. He claims that the company can't stop millions of underage users from lying about their age to access its apps, just like it can't control the negative content that users share. It remains to be seen which side's argument will prove the most convincing, but there is a lot riding on this case. According to Meta's own legal experts, each individual violation of laws like COPPA carries a maximum financial penalty of up to $53,000. When you add that up over literally tens of millions of young users across years of usage, Meta claims it could have to pay a jaw-dropping $1.4 trillion. The company's legal team used this figure >> [music] >> as a way to illustrate the absurdity of the case. It's the same amount as Meta's entire [music] market capitalization. If Meta was hit with a maximum financial penalty, it would be the equivalent of a death sentence. The company would be [music] forced into instantaneous insolvency, but prosecutors and US District Judge Yvonne Gonzalez Rogers have [music] indicated that the financial penalty would be closer to the $200 billion mark. Even that would be enormous, but Zuckerberg didn't wait for the verdict. Just days into the [music] trial, Meta capitulated. They struck an $18 billion deal to settle the case. They avoided the trillion-dollar doomsday scenario, but the fallout is still seismic. But money isn't the real focus here. There is much more [music] to this case. It's about holding Big Tech accountable for its actions. It's about proving that these ludicrously wealthy and influential companies can't be allowed to get away with whatever they want just [music] because they can afford the best lawyers and lobbyists. It's about setting a legal precedent that would send shockwaves across Silicon Valley and change the state of social media for generations to come. It's about shattering the Section 230 shield and ending the exploitation of people's natural emotions and neurological pathways. Many reporters are already labeling the trial the tech world's big tobacco moment. In the 1990s, there were a slew of suits filed [music] against tobacco companies which resulted in cigarette firms being forced to pay out hundreds of billions of dollars. It rewrote the rules of nicotine marketing and sales forever. >> [music] >> Back then, there was evidence to prove that the big firms knew their products were dangerous, but they didn't bother to warn the public. Meta's scenario is a little different, but the fundamentals are the same. The state say [music] Meta knew what it was doing was dangerous, but it didn't stop. It chose engagement and profit over protecting people. This landmark case changes everything. Meta's being forced to dismantle its digital slot machines for minors. Teen accounts face strict 2-hour time limits, blocked accounts from midnight to 6:00 a.m., and muted automatic push notifications. Without those validation and reinforcement systems, sites like Facebook and Instagram would no longer have the same level of control over people's minds and feelings. They'd have to transition from digital slot machines to [music] what they were originally supposed to be, spaces where people keep in touch with friends and family. And Meta's money-making model would take a hit. The company's built an entire empire around keeping people engaged with its products. If that all suddenly comes to a grinding halt, if engagement gets slashed in half or worse, then the company's ad revenue also suffers a knockout blow. Its stock price will will to record lows, but it won't stop at Meta. TikTok and YouTube could be forced to adopt the same age limits and restrictions. Zuckerberg won't want to be at a disadvantage. The algorithm and dopamine-releasing [music] features are in the crosshairs. The landscape of social media will change forever. The nightmare for Mark Zuckerberg is just starting. While he is fighting a trillion-dollar lawsuit, users are abandoning his platforms. Watch It's Not You, Nobody Likes Facebook Anymore to find out [music] why, or click on this.