U.S. Sends Iran Plan to End War

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0:33In a landmark verdict, Meta is found liable for allowing adults to prey on children. Plus, mediators pushed the U.S. and Iran to talk, though the sides remain far apart. The Iranians haven't responded.

0:45Benoit Faucon:There is no talks, there is no discussion, they haven't agreed to meet, and even they actually feel it could be a trap, that it could be just a proposal to ease our prices. And China's Communist Party cracks down on wine. It's Wednesday, March 25th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Meta has been found liable for failing to protect young people from a range of online dangers, including sexually explicit content, solicitation, and human trafficking. That was the conclusion of a New Mexico jury yesterday.

1:23A verdict partially read out here by Judge Brian Biedschild.

1:27Luke Vargas:On question one, did Metta violate the Unfair Practices Act by engaging in an unfair or deceptive trade practice? The jury answers yes. Question two, did Metta act willfully by engaging in an unfair or deceptive trade practice? The answer is yes. I asked Journal Tech reporter Sam Schechner to help untangle the verdict. This is a case under state law, and the state is using its particular code to go after a company. But if you step back, what we see is a state presenting evidence that a company allegedly ignored warnings about the dangers on its platform, and that the state argues that its design features let pedophiles engage with children.

2:13Luke Vargas:And what I think it shows is a new willingness by states, by courts, and now juries to hold social media companies responsible for what happens on their platforms. And that's a verdict and a trend that goes beyond even meta and beyond even social media. You told me offline, Sam, that there's a bit of a split happening here. These social media companies are under pressure sort of globally right now, but how that is being pursued in the U.S. has some distinctly American features compared to what we're seeing elsewhere. There's been, I think, building for a decade now, a sort of backlash against some of the perceived harms from social media.

2:51Luke Vargas:We had the Facebook files at the Wall Street Journal looking at internal documents from what was then Facebook and has since been renamed Meta. And in Europe, for instance, the EU passed the Digital Services Act. And that's a law that basically holds companies responsible for content on their platform and threatens them with big fines if they don't have robust systems for moderating it or handling potential problems. In the U.S., there's no nationwide law that does that. There's some consumer protection law. There's state laws. And so what we see is states and groups of states, but also individuals and class action lawsuits going to court to try to force these companies to either pay damages and ideally what they're aiming for is to change their practices underneath.

3:35Luke Vargas:There is, however, a lag time with all of these approaches. We're litigating the fallout of the social media revolution that began a generation ago. It remains to be seen how quickly courts, individuals, governments will tackle what we're seeing in the AI revolution. There are already a wave of lawsuits about AI chatbots. And so that is just starting to work its way through the courts. That was Journal Tech reporter Sam Schechner in Paris. Sam, thanks as always. Thanks for having me. As Sam mentioned, a jury is currently deliberating a similar case in Los Angeles in addition to more than 2 ,000 lawsuits pending in federal court.

4:12A Meta spokesman said the company disagrees with the verdict in New Mexico and plans to appeal. As part of yesterday's verdict, Meta was ordered to pay$375 million in civil penalties. It made 160 times that amount of revenue in the most recent quarter. And if Meta has its way, it could be making substantially more money in the next five years. The company is rolling out a new stock incentive program for top execs that could see some earn hundreds of millions of dollars if its market cap tops more than$9 trillion by 2031, a massive leap from its current$1.5 trillion. Meta has leaned heavily on stock awards amid the AI race, with the journal analysis finding that cash costs tied directly to those awards consumed 96 % of its free cash flow last year.

5:03Shares in British semiconductor designer Arm Holdings have soared off hours after it announced plans to sell its own chips for the first time, putting it into direct competition with long-time customers like NVIDIA and Alphabet. The new chip has been developed with Meta for use in data centers, with OpenAI, SAP, and CloudFare also signing on as customers. Arm designs power nearly every smartphone and tablet. Meanwhile, South Korean chip giant SK Hynix is eyeing Wall Street. The company plans to list in the U.S. later this year, looking to tap into global cash to fuel its high-end AI chip production.

5:41The exact size and timing of the listing is still under wraps, with SK Hynix saying it'll make a final decision on whether to list after the SEC's review and considering market conditions. And I can't believe I'm saying this, but the maker of a toothy elf named La Bubu has seen its profits quadruple to nearly$2 billion after the toy became a global status symbol. China's Pop Mart specializes in so-called blind boxes of collectible toys where you don't know which character is inside until you open it. La Bubu.

6:13Luke Vargas:Let's do a La Bubu unboxing. I really want the loved ones. This was supposed to be the world's biggest blind box. I'm actually surprised they had these in stock. This is the most exciting day of my life. My best friend, Brooke, sent me a little boo-boo. Well, despite massive sales growth, investors appear worried that the company won't be able to keep up the momentum, with its stock tumbling more than 20 percent this morning. Coming up, a federal judge appears to side with Anthropic as it challenges the Pentagon's labeling of it as a national security risk. And we'll get the latest on diplomatic efforts to end the war in Iran.

6:45Those stories and more after the break.

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7:23The U.S. has sent Iran a 15-point plan to end the war, which calls on Tehran to fully reopen the Strait of Hormuz, along with a previous list of Trump administration demands. Journal Middle East correspondent Benoît Foucault has the details.

7:38Benoit Faucon:Iran should stop enriching uranium for its nuclear program and should dismantle its biggest nuclear enrichment facilities. Iran should stop funding proxies and also reduce its missile program. One thing that is a step up compared with the previous discussions is the fact that there would be a complete lifting of sanctions. The oil embargo, the banking sanctions, I mean, that's really blocking a lot of Iran's trade and making whatever remains of that trade much more expensive and less profitable. So that's kind of the best thing that Iran could get out of these negotiations. Mediators from Turkey, Egypt and Pakistan are pushing to arrange a meeting between U.S.

8:20and Iranian officials tomorrow in the hopes of ending the war in the next 48 hours. But Benoit says that Gulf states are growing alarmed by Trump's eagerness to do a deal.

8:30Benoit Faucon:The U.S. is subject to push and pull pressure. So you have countries like Qatar, whose liquefied natural gas exports have been interrupted by the conflict. So it's catastrophic for them. But there are other countries like Saudi Arabia and United Arab Emirates who feel like you can't really have an end to the war if Iran is not weakened militarily. They don't want Iran to be able to attack its neighbors. So they want Iran disabled and they want the Strait of Rome to reopen. Otherwise, they feel like it's going to really be a negotiation that effectively re-empower Iran and enable it to attack again.

9:05The Pentagon is also planning to deploy around 3 ,000 American soldiers to the Middle East to support operations against Iran, though officials cautioned that a decision to put boots on the ground in Iran hasn't been made. A federal judge in California has said the U.S. government's move to ban Anthropic appeared to be a punishment for making its contract dispute with the Pentagon public. U.S. District Judge Rita Lynn said that would be a violation of the First Amendment and that the Trump administration's actions didn't align with its stated national security concerns. Anthropix sued the U.S.

9:39government to halt its designation as a supply chain risk after the company took issue with the potential of its models being used for mass domestic surveillance and autonomous weapons. Lynn asked for more evidence before making her decision on Anthropix's request for an injunction. And U.S. lawmakers are expanding their scrutiny of private equity to include its influence over child care. Yesterday, Oregon Democratic Senator Jeff Merkley announced an investigation into whether two firms are putting their own profits ahead of the safety and welfare of children at the facilities they control. Swiss firm Partners Group declined to comment, and New York-based American Securities didn't reply to a request for comment.

10:20Federal lawmakers recently introduced bills aimed at curbing private equity's influence in a range of industries, including health care and housing. And finally, for years, a thirst for fine wine in China has been a boon for the world's top growing regions, with producers in California, Australia, and France in particular, cashing in.

10:40Luke Vargas:Even as there were fewer drinkers in many other parts of the world, Chinese people were getting wealthier, they were drinking more wine, and it looked very promising. You know, wine sales were just booming. That's the journal's John Emont. He says that in 2018, about$3 billion of foreign wine was brought into China, but that last year that fell by about half, in part because of a souring economy. But another major factor was Xi Jinping's crackdown on so-called unbecoming behavior by Communist Party officials, who apparently were too often becoming uncorked at government events. This has been really tough for winemakers in places like Bordeaux and Australia, where the industries became to a great degree reliant on Chinese buyers.

11:24Luke Vargas:Both of these regions, for different reasons were particularly favored by Chinese wine buyers and began really catering to Chinese tastes. And now that demand has really evaporated in China, it's been quite tough for growers in these regions. So we're seeing winemakers having to pull up vines in both countries and just leave fruit to rot. Australia's Treasury Wine Estates, one of the world's largest wine companies recently said that wine valued at about$150 million was just sitting in warehouses in China, while European drinks giants Pernod Ricard and Diageo reported double-digit drops in China sales.

12:03Yeah, that's it for What's News for this Wednesday morning. Today's show was produced by Daniel Bach and Hattie Moyer. Our supervising producer is Sandra Killhoff, and I'm Luke Vargas with The Wall Street Journal. We will be back tonight with a new show. And until then, thanks for listening.

12:34Luke Vargas:We'll see you next time.

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