Landmark Social Media Addiction Trial

0:00The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand, but by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. From coast to coast, unlock adventure at Red Lion Hotels by Sonesta, where restful sleep, friendly service, and trusted local knowledge are part of every stay.

0:38Red Lion makes it easy to feel welcomed, comfortable, and connected wherever the road takes you. Whether you're traveling for business or pleasure, you can spend less and make more of every trip. When you sign up for Sonesta Travel Pass, you'll get their best rates instantly. Go to Sonesta.com to book your stay and unlock the best rates with Sonesta Travel Pass. Here today, roam tomorrow. Join now at sinesta.com. Terms and conditions apply. This podcast is brought to you by WISE, the smarter way to manage your money internationally. If you're getting a headache from juggling different currencies and different bank accounts in different countries, there's a better way to receive money in the currency you need without the slow transfer times or hidden fees.

1:19Meet WISE, the savvy way to handle your money internationally. Hold balances in up to 40 currencies with the mid-market exchange rate on every conversion, Whether you're receiving payments from tenants abroad, earning as a digital nomad, or converting dividends from your international investments, the WISE multi-currency account is for you. Be smart. Get WISE. Download the WISE app today or visit WISE.com. Terms and conditions apply. This is Bloomberg Law with June Grosso from Bloomberg Radio. Mr. Zuckerberg, you and the companies before us, I know you don't mean it to be so, but you have blood on your hands.

1:59You have a product. You have a product that's killing people. That was Republican Senator Lindsey Graham during a Senate Judiciary Committee hearing two years ago, a rare example of Democrats and Republicans coming together to attack social media CEOs like Mark Zuckerberg for not protecting kids online. Zuckerberg pushed back on some recent studies that suggested that social media use was detrimental to the mental health of teenagers. Mental health is a complex issue, and the existing body of scientific work has not shown a causal link between using social media and young people having worse mental health outcomes.

2:44Well, now Zuckerberg will have a chance to make his case to a jury in a landmark trial over claims that the top social media companies have deliberately gotten teenagers addicted through design choices. On trial are Meta, the owner of Instagram and Facebook, and Google, the owner of YouTube. Snap settled the case last week, and TikTok settled on the eve of trial. Joining me is Colin Wacke, a cybersecurity and data privacy partner at Hall Estill. Colin, the plaintiff in this case is a California woman who's now 20 years old. Tell us about her allegations in this lawsuit. This is really the first one that's going to trial.

3:27There are dozens, if not hundreds, of similar lawsuits out there. And the basic allegation in this case, in all of the cases, is that the algorithms that have been put out there by the social media companies, as well as all the bells and whistles they put on their social media platforms, have made their products addictive. So this is very much akin to the tobacco litigation in the 1990s. Are there harms that flow from that addiction? One, is it addictive? And then two, are there harms that flow from it? The jury is ultimately going to decide that in this case. This is a novel theory that compares social media sites to defective products?

4:06Yes. And in fact, some of the claims even relate back to like a nuisance type claim. But long story short is, is that the way these algorithms operate is they get you addicted through casino style techniques. So casinos know, for example, that every time that you put a quarter in, you shouldn't get a reward because then you won't come back. So it's the timing with which you see and the content that you see it in. And then what are the consequences that flow from that? So, for example, mental health harms as a result of that. You could think about children in school and the distractions. That's some of the allegations that have come out in these cases is, you know, Instagram started losing teenagers and they were sitting there going, how do we get back more teenagers?

4:46Well, let's figure out a way to get our platforms in schools. Right. And so the harms that flow from this are unique to each individual. But you can see how they compound. So do they have to show or are they they're alleging that the social media companies deliberately made these design choices? Correct. It is intentional that they have done this. And the thing is, I think that there's plenty of testimony out there that probably supports the goal of making individuals remain on platforms as long as possible, keeping their attention there so that they can increase the number of viewers and thereby increase the number of advertisements.

5:23So I don't think there's really anything new about that, but the tech companies are coming in and saying, whoa, whoa, whoa, whoa. We already know, based off of the Supreme Court's ruling on Section 230, that the algorithms themselves are protected speech. And so the unique claim in this particular case is, yes, that may be speech, but the other bells and whistles that you're putting onto this and what you're doing within it is not speech, and rather it's conduct that is getting us addicted to your platform. Explain Section 230 for those who are not familiar with it So Section 230 is a law that was passed in the mid-90s At the infancy of the internet And the goal of Section 230 was to say Hey listen, all of these people are on America Online Posting all sorts of things Maybe some of them are child pornography Maybe some of them are pictures of elephants Who knows who cares But we don't want to hold AOL, America Online Liable for what someone else posts And so in today's day and age, with regard to Facebook, TikTok, all of those sorts of companies, whatever you post on there, the companies can't be held liable for.

6:30And that's a result of a now decades old law that needs to be updated pretty badly. As far as this case, has the judge ruled about the applicability of Section 230? Well, there were attempts to get the case dismissed under those claims. And thus far, the case is going to trial. And so ultimately, the judge denied those defenses. I have no doubt this is the type of case that will be brought up in front of the United States Supreme Court, ultimately, to make that decision. But I will tell you, in many of the other copycat lawsuits, it's the exact same sort of thing. They're making the argument that Section 230 affords them this protection.

7:04And that's why it's probably going to go to the Supreme Court. And so the tech companies are arguing they're not legally responsible for the effect of the content made by users. So explain what their out is here, what they're trying to get to. Right. So in short, the fact that you're being shown what you want to see is your own choice. You could choose to see and view different things based off of the likes and your viewing habits and all of that. So they're essentially saying all we're doing is giving you what you want. We're not doing anything to make it more enticing than it already is. And part of the argument, too, is how much is your cell phone itself addictive versus the platforms themselves, right?

7:47So every time you get an iPhone update, for example, it becomes a little bit brighter. Why? The brighter the screen, the more dopamine in the brain. The more dopamine in the brain, the more you want to look on your screen. That's why it's hard for you to figure out without going to Google how to set your screen to black and white. They don't want you to know that. So part of their argument here, too, is how do you distinguish which component of this is addictive? I hadn't realized that. I learned something new today about the screens. Here, the 20-year-old woman says that more than a decade of social media use left her addicted and depressed.

8:18Google's challenged the narrative, saying that she experienced difficult family relationships, abuse and bullying at school. And that played a role in her mental health struggles. I mean, how difficult is causation going to be here for her to prove that, you know, it was her addiction to the platform rather than all the other things happening in her life? Well, it's one of the sayings that we have in personal injury cases, which is you find your plaintiffs as they are. And so in this particular case, yes, they have some pretty good arguments that the mental health harms are a result of her history.

8:54But the question then becomes, were they exacerbated by virtue of the negligent conduct? And if that's the case, then the proximate cause is, in fact, the social media platform and not the historical trauma that she experienced. And so that's what I was saying earlier about the mental health harms as part of the allegations in this case, because it is going to be an issue for the jury to determine what was the ultimate cause, what are those damages, and on top of that are punitive damages, something that could be afforded. There is a debate within the mental health field about the connection between social media and increasing teenage rates of depression, anxiety, suicide ideation.

9:34But there is a 2023 report by the American Psychological Association that found that social media use is not inherently beneficial or harmful to young people. Is that debate going to enter the courtroom? Are we going to see, you know, experts on both sides of the issue? Absolutely you will. Just like you saw with the tobacco litigation. I mean, that's the reality is you're going to find experts on both sides of this issue. But at the end of the day, the reason why the jury trial system is so good here in the United States is because our jurors really are good at detecting BS. And so they'll be able to figure out pretty quickly, not just from what the testimony is, but from their own personal experiences.

10:15I don't think that anyone can ultimately hear the testimony of these executives and former executives and decide that they didn't at least try to make it more addictive. Whether they accomplished that goal may be a different story, but it's pretty clear they at least tried. As you mentioned, there are more than 1 ,600 plaintiffs, including there are over 350 families and 250 school districts on the federal and state level. Why isn't this being tried as a class action lawsuit? Well, because the harms flow differently. So for a class action, you have to have similarity and damages and several other similar class items to make you a class.

10:53So, for example, if your dishwasher went out, all the other thousand people who bought that dishwasher, you're in the similar class. You got similar damages. But in this particular case, the harm of this particular female plaintiff, right, is different than a mother bringing a lawsuit on behalf of her child. and those damages are different because you're going to calculate a different lifespan based on age alone and then not only that but you look at the school district lawsuits well what are the damages there it's the disruption in the classroom it's the additional counselors that are needed so each of these different damage components makes them difficult even for you know a litany of school districts to come together you couldn't see that across the country because everybody is funded differently so that's why you're not seeing it as a class action but i'm confident that if this case goes to trial and there is a judgment, you're going to see a lot more of these cases settled.

11:42Explain what a bellwether trial is and is this a bellwether trial? This is absolutely a bellwether trial. So it's very similar. Recently, for example, you saw Tesla actually went to trial and won on one of the cases where their automatic driving vehicle injured somebody. And so that is going to embolden Tesla into the future. So if you imagine a scenario in which the social media companies do win this case, they're going to feel emboldened to continue to pursue it. On the flip side of that coin, if the plaintiffs win this case, then at the end of the day, you're going to start seeing a lot more settlements.

12:14Coming up next on the Bloomberg Law Show, I'll continue this conversation with Colin Wacke of Hall-Estel. Jury selection is underway in the case. So what kind of jurors are the lawyers from each side looking for? And how much depends on the testimony of a CEO like Mark Zuckerberg? I'm June Grosso, and you're listening to Bloomberg. This message is brought to you by Apple Card. Apple Card members can earn unlimited daily cash back on everyday purchases wherever they shop. This means you could be earning daily cash on just about anything, like a slice of pizza from your local pizza place or a latte from the corner coffee shop.

12:53Apply for Apple Card in the Wallet app to see your credit limit offer in minutes. Subject to credit approval, Apple Card issued by Goldman Sachs Bank USA, Salt Lake City branch, terms and more at applecard.com. Support for the show comes from Public. Lately, it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades, and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth. On Public, you can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti.

13:28Retirement accounts, yep. High yield cash, Yes, again. They even have direct indexing. Public has modern design, powerful tools, and customer support that actually helps. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market.

14:01public.com slash disclosures. Hello, hello. I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvind Krishna. And I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example? If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today, with the goal of being 70 % more productive.

14:51Yeah. Wow. So we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process, because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit ibm.com slash smarttalks.

15:22Would you like now to apologize to the victims who have been harmed by your product? Show them the pictures. Would you like to apologize for what you've done to these good people? Meta CEO Mark Zuckerberg was lectured by both Republican and Democratic senators when he testified at a hearing on the harm social media platforms posed to young people in January of 2024. Now Zuckerberg will have to testify in a courtroom in a landmark social media addiction trial. Part of his testimony will most likely echo some of what he said before Congress when he elaborated on the safeguards Mehta has added over the years.

16:01Over the last eight years, we've built more than 30 different tools, resources and features that parents can set time limits for their teens using our apps, see who they're following or if they report someone for bullying. For teens, we've added nudges to remind them when they've been using Instagram for a while or if it's getting late and they should go to sleep, as well as ways to hide words or people without those people finding out. I've been talking to an expert in data privacy, Colin Walkie, a partner at Hall Estill. Colin, the fact that Snap settled last week and TikTok settled on the eve of trial, what does that tell you about how the social media companies are evaluating the risk of going to trial?

16:42I think what most people don't realize is that lawyers' jobs are to manage risk. We are risk managers. That is it. And so for the plaintiffs in this case, if they settle, the reason why is because they know that this is going to be taken all the way to the Supreme Court, and that's going to take another five years, whereas they can get some money today and avoid that risk, right? So there's an incentive for the plaintiffs to settle from that regard. And there's an incentive for the defendant to settle because they don't want this information to get out there in the real world about how much your privacy is being pilfered for profit.

17:12They don't want to figure that out. They don't want their dirty laundry aired. And so this is why settlements happen is because both sides are incentivized to not continue on with the case, whether they're right or wrong. And I'm wondering how they evaluate the risks, because even if they settle this case, there is the next case and the next case and the next case. Whereas if they try this case and win, they'll have a better road ahead. That's absolutely correct. And one other thing is, is that Meta has plenty of money for lobbying. So at the end of the day, if this does result in some sort of liability to them, I have no doubt that all of the tech companies are going to go to Congress to seek some form of a Section 230 type amendment to further protect them in the future from this type of litigation.

17:57It's most likely that Meta CEO Mark Zuckerberg and Adam Mosseri, who heads Instagram, are going to take the stand. Zuckerberg has testified before Congress. Explain how different it is to be in a courtroom and subject to cross-examination and being in Congress. Well, it's wildly different because if you remember back in 2014 when Mark Zuckerberg came and testified in front of Congress, one of the congressmen actually thought the reference to a cookie was an edible item and not a pixel contained on your computer screen okay so the difference is is that these attorneys in the courtroom know the technology they know the facts and they're going to be able to effectively cross-examine someone about what a cookie is and how they're tracking your data from one website to another and then it begs the question why are you tracking my information from my insurance carrier.

18:50Oh, well, so we can show you more ads. OK, why are you showing more ads? Well, so we can get you addicted. That's how the cross-examination is going to work that you would have never seen in Congress. I think that Zuckerberg has a tendency to seem sort of wooden when he talks. Suppose he comes across that way to a jury. I mean, how much depends on how they view him? Well, it goes back to the old saying that, you know, a jury, if they like you, they like your cause. And so that's a hurdle that the tech companies are going to have to overcome at the start of this trial because they've had enough black eyes already that the jury's not going to light them out the gate.

19:23And the plaintiff here will have to take the stand. Yes, the plaintiff will have to take the stand. And I have no doubt that her mental health history will come up and the trauma that she has suffered and all of that is fodder for cross-examination as painful as it may be for someone to go through that process. It has to occur in order for the jury to have a full understanding and appreciation of whether or not the trauma in this case was related to addiction from social media or prior. This is a civil trial, not a criminal trial. So people may have heard, oh, defendants don't have to testify, etc.

19:57But explain how a civil trial is different. Yeah, so there is no right against self-incrimination in a civil trial. In fact, if you let's assume for half a second that Mark Zuckerberg had planned on doing something illegal in order to make this an addictive product. If he asserted his Fifth Amendment right in a civil trial, the judge would instruct the jury that they are able to make an adverse inference as to his response. Otherwise, you don't have a Fifth Amendment right against self-incrimination in a civil trial. Rather, because you're not going to jail, rather you face damages as a result of your conduct.

20:36Jury selection is underway right now. Tell us the kind of jurors that the plaintiff's lawyer will be looking for and the kind of jurors that the defendant's lawyer will be looking for. Yeah. So if I'm the plaintiff's lawyer, I am looking for individuals who are going to be used to using social media and find it problematic for themselves or their family members. Right. So we all have the uncle or the dad who spends all day long on Twitter and you're rolling your eyes. sitting there going, do you not have anything else to do? You want somebody who is frustrated about the system on there from the plaintiff's perspective.

21:13And from the defendant's perspective, you're looking for someone who is willing to say, you know what, we live in a capitalistic society in which individuals have freedom of choice and these people are choosing to download this app and spend time on it. That is a choice that they are making. And so you're going to want someone who is very libertarian in their perspectives on life. What about parents? Yeah, and that goes back to, I think that if I am on the plaintiff's side, I want as many parents on there as possible. Again, you're going to have some parents who don't care, right? We have created a situation in which the reason why our children are addicted is because we're sitting there throwing these in their hands at the age of five years of age.

21:56And so, you know, some parents may not care, but it's the parents who do care that you want on that stand or in that jury box. Do you know, besides the testimony, are there internal documents that are going to be introduced? Yes, there will be internal documents that will be utilized. They were utilized in depositions. Many of them have been redacted for public use at this time. The judge will figure out how to handle that with the jury on any confidential information. But yes, there will be documentation as well that the jury can rely upon aside from the testimony itself. These are state cases, but there are also federal cases that are going to trial in June.

22:35Is that also bellwether or? Yes, yes. And you could also think about it this way, right? So we're talking about these bellwether cases. What if the plaintiff wins? What if the defendant wins? And earlier we talked about, well, will the defendant feel emboldened? And they probably will as a social media company feel emboldened. But you have to remember going back to the original point of why these aren't class action cases. Each case is different and unique. And so in this particular case, we have a plaintiff who doesn't have the best history, so to speak, versus if you had a five-year-old child in there who's got mental health issues from being addicted, they're not going to have the same traumatic history.

23:09They're only five years old, right? So each case is going to turn on the facts uniquely, but I do certainly think that this is going to embolden whoever wins. And also, some states are enacting laws to protect against this. Well, each state is doing something a little bit different. So, for example, you know, Oklahoma has passed a law that says you're not allowed to have cell phones during the school day. And so that keeps cell phones and social media away from kids at least for nine hours of the day. But you're also seeing other states require age verification for children and those sorts of things.

23:43Whether that's actually effective is a different story. You and I have had this conversation before about a lot of this is about personal responsibility on the parents. So, for example, Oklahoma and many other states have passed age verification laws for pornography. All a child has to do is download a VPN and now they're in Washington, D.C. They're not in a state with an age verification law. And so, you know, trying to keep up with the technology is very hard from a legal perspective. And that's why personal responsibility is so important. You talk about addictive. I can start reading one news story and then go on to the next about the same subject and then the next and the next all on different sites.

24:21It seems pretty addictive to me, and I'm wondering if you have jurors who are like that, if it hurts the plaintiff's case, because there are so many addictive things on your phone. You have games that are addictive. Well, but to your point, I mean, what you just said, you can read news from several different sites, right? So are you addicted to a social media platform or the Internet itself? Because here you are spending eight hours a day. You're not on a social media platform, but you're going to Washington Post. You're going to Bloomberg News. You're going to New York Times. you go into all of these various websites and you're spending all day on there and you forget about what you're supposed to actually be responsible for.

24:57Let's just say plaintiffs win here. How will they look at the damages, the jury? So I'm not an expert in California law, but generally speaking, they're going to look at the actual damages. So to the extent that this woman had gone to see the therapist and those sorts of things, that'll be a calculation included in there. How much did it cost? The amount of time taken off of work or the inability to obtain a job may be a component of her damages, and then ultimately a request for punitive damages, because if it can be shown that this was done with intentional and reckless conduct, then there's an argument to be had that they should be punished for that behavior.

25:32I heard one of the plaintiff's lawyers talk about, we want them to correct this conduct. I mean, could a judge actually order Metta to... Yes. Yeah, there could be injunctive relief as a component of this. So, for example, ultimately, in some of these cases, if it's declared a nuisance, then the social media companies are going to have to abate that nuisance. And how are they going to do that? They're going to go in and fix their algorithms to make them less addictive, to show you things that you don't necessarily want to see, which might actually be a good thing for a few of us. Would you say it's more or less likely that the trial is actually going to start after jury selection?