Quick overview

---

Rulings totaling more than $380 million in damages are opening the door to thousands of additional lawsuits, raising market concerns about the potential impact on Big Tech balance sheets.

Shares of Meta Platforms fell more than 7% in today’s session, hitting their lowest level in eleven months, after two U.S. juries found the company liable for failing to adequately warn and protect underage users. The verdicts reignited investor fears of a wave of multi-billion-dollar fines and follow-on litigation, weighing on the broader sector.

A Los Angeles jury on Wednesday held both Meta and Alphabet — Google’s parent company — responsible for the depression suffered by a young user who allegedly developed an addiction to Instagram and YouTube. Damages in that case were set at $6 million.

[[META/USD-graph]]

In parallel, a New Mexico jury ordered Meta to pay $375 million for misleading users about the safety of its platforms for children and for facilitating their exploitation.

Meta, Alphabet, Snap, and ByteDance — the owner of TikTok — collectively face thousands of lawsuits alleging harm to the mental health of teenagers and young users, although the latter two companies reached out-of-court settlements prior to trial.

A turning point for social media?

This marked the first week of oral trials in what is shaping up to be a prolonged legal battle. More than 2,400 cases have been consolidated before a single federal judge in California, while thousands of additional claims are being handled in parallel within the state court system.

The rulings could set a precedent that challenges the legal protections historically enjoyed by major technology platforms in the United States. As a result, shares across the sector are under pressure.

Meta is down more than 7%, trading at its lowest level since mid-April last year. Alphabet is off 2.6%, hovering near its weakest level since November. Snap is the worst performer, plunging 12% on the session and hitting an all-time low.