Meta (META) stock fell more than 8% on Thursday, a day after a Los Angeles jury found on Wednesday that the company, and YouTube-parent Google (GOOG, GOOGL), were negligent in protecting young users on their platforms.
The landmark suit — which revolved around whether the companies designed their apps to keep young users hooked and if they knew doing so was dangerous — is seen as a potential bellwether for a raft of similar suits that schools, states, and parents have filed against the firms.
Shares of other social media platforms like Reddit (RDDT) and Snap (SNAP) were trading lower on Thursday in response to the ruling, falling more than 10% and 11%, respectively.
Shares of Google’s parent company, Alphabet, were down closer to 2%.
In a statement following the verdict, a Meta spokesperson told Yahoo Finance, “We respectfully disagree with the verdict and will appeal. Teen mental health is profoundly complex and cannot be linked to a single app. We will continue to defend ourselves vigorously as every case is different, and we remain confident in our record of protecting teens online.”
Google spokesperson José Castañeda said in a statement, “We disagree with the verdict and plan to appeal. This case misunderstands YouTube, which is a responsibly built streaming platform, not a social media site.”
The Los Angeles case follows a separate verdict in New Mexico’s own lawsuit against Meta in which the state accused the company of misleading its users about the safety of its products and endangering children.
On March 24, the jury in the New Mexico case found Meta liable, ordering the company to pay $375 million in penalties.
Meta is also facing another lawsuit filed by state attorneys general in 2023, in which the states made similar arguments to the Los Angeles case.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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