Meta Platforms (META) will have to face a lawsuit from the Massachusetts attorney general, who claims the social media company intentionally designed features on Facebook and Instagram to make young users addicted. The decision came from the Massachusetts Supreme Judicial Court, which ruled that the case can move forward. This is important because it is the first time a state’s highest court has looked at whether federal protections for internet companies also apply to claims about addictive platform design. As a result, the ruling could have huge implications for how tech companies are held accountable.
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Unsurprisingly, Meta strongly denies the allegations and says that it takes steps to protect younger users. However, the decision comes shortly after other legal setbacks. For example, a jury in Los Angeles recently found Meta and YouTube (GOOGL) negligent for creating platforms that harm young people, and awarded $6 million to a woman who said she became addicted as a child. In addition, another case in New Mexico resulted in a $375 million penalty against Meta over claims that it misled users about safety and allowed harmful activity.
When it comes to the Massachusetts case, the state argues that features like push notifications, “likes,” and endless scrolling were designed to take advantage of teens’ fear of missing out. According to the lawsuit, internal research showed that these features could harm young users, but executives chose not to make changes. Meta had tried to dismiss the case using Section 230, a law that usually protects tech companies from lawsuits related to user content. However, the court agreed with the state that this case is about Meta’s own business decisions and design choices, not user content.
What Is the Price Target for Meta?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 39 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $847.70 per share implies 34.7% upside potential.
