Tech giants get black eye

Potential platform changes may threaten advertising revenues.

- Kurt Wagner and Alexandra Levine

A landmark jury verdict holding Meta Platforms and Alphabet’s Google liable for harming a young user with products designed to be addictive threatens to put the social networking companies in the same category as Big Tobacco and opioid makers — a potential crack in their shield from legal responsibility for what happens on their platforms.

While the $6 million (about R102 million) in damages a jury in Los Angeles awarded to the 20-year-old plaintiff — which the companies vowed to appeal — will barely register on their balance sheets, the impact of the verdict will likely be more damaging and harder to quantify.

The loss, in the first of thousands of product-liability lawsuits against Meta, Google and other social networks, is the kind of black eye that often leads to an increase in government regulations.

Unless the verdict is overturned on appeal, the companies may need to change how their products work, a move that could jeopardise the valuable advertising businesses that keep platforms like Instagram and YouTube profitable.