BIG TECH'S BIG TOBACCO MOMENT: META AND YOUTUBE FOUND LIABLE FOR ADDICTING A GENERATION

0:03 Caalaroga Shark Media. Good morning. I'm Garrett Fisher, Monday, March thirtieth, twenty twenty six. I want to start today with a number, actually two numbers. Three hundred eighty one million dollars. That's what two American juries ordered Meta to pay last week for what they found was a deliberate pattern of harming children. Three hundred and seventy five million dollars in New Mexico for enabling child sexual predators on its platforms. Six million dollars in Los Angeles for engineering addiction in a young girl starting when she was six years old. Here's the other number, one point five trillion dollars. That's Meta's current market cap. Take a moment with that. The jury found that this company deliberately designed products it knew were harming children, concealed what it knew, and kept building anyway. And the price for all of that, two separate verdicts, two separate states, is three hundred and eighty one million dollars. That's zero point zero two five percent of what the company is worth.

1:13 One of Kaylee's attorneys stood before the jury in Los Angeles holding a jar of M and ms. He said, each piece of candy represented a billion dollars of Meta's value. He scooped out a handful. He said, that wouldn't make a difference. He scooped out two handfuls. Still wouldn't make a difference. Then he cracked open one blue eminem with his teeth. Said that was roughly two hundred million dollars. Said they do not want to feel the pain for what they did. He was right, and a jury still gave them the blue eminem. Today we're covering everything, both verdicts, what the trials revealed, and what it actually means for the two thousand families still waiting in line behind Kaylee.

1:56 This is the episode we've been building towards since February. Get into it. Segment one. Who is Kaylee and what did they do to her? We covered this trial on February nineteenth, when Zuckerberg took the stand. Go find that episode if you need the foundation. Today is the verdict episode, So I'm going to give you the context you need and then get into what the jury decided and why it matters. Her name is Kaylee. She's twenty years old. She's from Chico, California. In court document, she's identified as KGM because the claims relate to incidents that occurred while she was a minor, and for a long time, the only public name attached to this case was a set of initials. She is not a set of initials. She is a person, and her story starts at age six.

2:50 That's when Kaylee first started using YouTube, six years old. At age nine, she was on Instagram. By sixteen, she was spending more than sixteen hours a day on the platform. She described getting an emotional rush from likes and notifications that kept her glued. She developed depression, body dysmorphia, suicidal thoughts. She spent hours using beauty filters, digital tools that altered her face to look more like the images she was being fed by an algorithm that had learned with extraordinary precision exactly what would make her feel inadequate enough to keep scrolling. She told the jury she did not experience the negative feelings associated with her body dys morphia diagnosis before she began using social media. The platforms came first.

3:38 The damage followed Meta's defense, and I want you to hear this clearly because it matters, was that Kaylee's mental health issues were caused by a difficult home life. Emotional abuse, bullying, learning disabilities. Social media wasn't the cause, they argued, She came to the platforms already struggling and used them as a coping mechanism. Look, I'm going to be honest with you. Even if we accepted that framing and the jury didn't, it doesn't do what Meta thinks it does. It actually makes it worse. Because Kayley's lawyers address this directly. If you know that vulnerable children are the most susceptible to addiction, and you design a product that optimizes for that susceptibility, and then you defend yourself by saying the most vulnerable kids were already vulnerable, that's not a defense. That's a confession of motive. We know from their own internal research.

4:32 Their own documents entered into evidence that Meta conducted a study called Project Mist that surveyed one thousand teens and their parents. Two findings. First, children who had experienced trauma and stress were particularly vulnerable to addiction. Second, parental controls made little impact. They knew the kids most likely to get hooked were the ones already suffering. They knew parents couldn't stop it, and they kept optimizing the algorithm anyway. That's not a mistake, that's a choice. What the trial revealed. The design features at the center of this case aren't abstract. They have names, and they have purposes. Infinite scroll, the feed that never ends so you never have a natural stopping point. Algorithmic recommendations, the system that doesn't show you what you ask for, but what will keep you engaged, longest auto play videos, beauty filters, notification systems engineered to create the same dopamine loop as a slot machine. Plaintiff's attorney Mark Lanier showed the jury internal company documents, emails where a Meta employee said Instagram is like a drug and employees are basically pushers. Internal Google documents that compared some company products to a casino. These comparisons weren't made by critics or journalists or congressional committees. They were made by employees inside the companies, written down, saved, and event actually introduced into evidence in a Los Angeles courtroom. Mark

6:04 Zuckerberg sat in that courtroom on February eighteenth and testified under oath, the first time he'd ever answered questions about child safety in front of a jury. He acknowledged four million children under the age of thirteen were on Instagram, a platform whose rules say you have to be thirteen to sign up. When asked how children were getting on the platform, he said, there are a meaningful number of people who lie about their age to use our services. That was his answer. People lie, not we failed to verify. Not we knew and didn't act people lie. Instagram had Adam Mussi testified that he doesn't believe people can be clinically addicted to social media. He used the phrase problematic use, spending more time on the platform than you feel good about.

6:54 And here's the sentence that I keep coming back to from his testimony. He said, it's not good for the company over the long run to make decisions that profit for us but are poor for people's well being. Not good for children, not wrong, not harmful, not good for the company. That is how these executives think about the children on their platforms as a long term business consideration. Also from the trial, whistleblower Arturo Beijar, former engineering director at Meta who left the company after watching his own fourteen year old daughter received sexual solicitations on Instagram. He testified about what the algorithm that makes Meta so profitable actually does in practice, he said, and I want you to hear this. The product is very good at connecting people with interests, and if your interest is little girls, it will be really good at connecting you with little girls.

7:49 Nobody was paying attention to her. That's the truth. Underneath all of the corporate language about safety tools and teen accounts and algorithmic guardrails, nobody was paying attention to the kids. The verdict the jury deliberated for more than eight days. They found Meta and YouTube negligent in designing and operating their platforms. They found those designed decisions caused harm to Kaylee. They found the companies were aware their platforms could have adverse effects on miners and failed to warn users. And they found the companies acted with malice, oppression, or fraud, which is why there were punitive damages on top of compensatory damages. The split metabear seventy percent of the responsibility, YouTube thirty percent. Total damages six million dollars three million compensatory three million. Punitive. TikTok and Snaps settled before trial for undisclosed amounts, which means even they looked at the evidence and decided they didn't want a jury seeing it.

8:52 Ten of twelve jurors found both companies liable, two dissented. That's a super majority of regular people who heard five weeks of evidence, heard the executives testify, saw the internal documents, and said, yes, this company harmed this child, and they knew what they were doing. Outside the courthouse, one of the jurors, she gave her first name as Victoria, said the jury wanted to focus on the future, what teens and children would be subjected to in the future. They weren't just deciding Kayley's case. They were trying to set a precedent. They set one. That's what a Bellweather trial does. This verdict will be in the file of every lawyer representing one of the two thousand pending cases. Every jury that convenes in the next wave of trials will know what this jury decided. Coming up the other verdict, New Mexico.

9:45 This one isn't about addiction, It's about predators, and meta's own internal documents said enabling encryption would stop them from reporting seven and a half million instances of child sexual abuse material to law enforcement. They the implemented the encryption anyway. That's next. Welcome back the Los Angeles verdict happened on Wednesday, but there was another verdict the day before Tuesday, March twenty fourth, in Santa Fe, New Mexico, And in some ways this one is worse. New Mexico Attorney General Raoul Torres filed suit against Metta in twenty twenty three, not over addiction, over child sexual exploitation. His office ran an undercover operation. They created a fake Facebook and Instagram profile of a thirteen year old girl, and according to Torres, that account was immediately quote inundated with images and targeted solicitations from child abusers. An undercover fake profile of a thirteen year old was standing up on Meta's platforms for roughly thirty seconds before the predators found it. That's the product Zuckerberg is telling congressional committees and juries and the public that he works hard to protect children on The lawsuit accused Meta of creating what Toras called a breeding ground for child predators on Facebook, Instagram, and WhatsApp, of

11:16 misleading users and the public about the safety of those platforms, and of concealing what the company knew about how predators were using its tools. The jury deliberated for one day, one day after a six week trial. They found Meta liable on all counts, willfully engaged in unfair and deceptive and unconscionable trade practices, and ordered the company to pay three hundred and seventy five million dollars in damages, the first time a US state has successfully sued Meta over child safety. The jury didn't take long to decide what the evidence showed. There were two pieces of evidence from this trial that I want to spend time on because they're not abstractions, their documents with dates and names and decisions attached to them. The first, in twenty nineteen, Mark Zuckerberg decided to implement end to end encryption by default on Facebook Messenger. End to end encryption means messages can only be read by the center and recipient, not by Meta, not by law enforcement, not by anyone else. It's a privacy tool that has legitimate uses. It's also a tool that makes it significantly harder to detect and report the sharing of child sexual abuse material. Internal Meta documents entered into evidence showed that employees raise this concern directly. Their own people told them implementing this encryption would impact the company's ability to report Approximately seven point five million instances of child sexual abuse material to law enforcement annually seven

12:48 point five million reports gone. The decision was made anyway, and then in the middle of the New Mexico trial, Meta quietly announced it would stop supporting end to end encrypted messaging on Instagram. The spokesperson said very few people were opting in, but they rolled it out anyway in twenty nineteen, knew what it would cost in reporting, and reversed it under legal pressure in twenty twenty six. That's not a product update, that's a tell there's a playbook for this. You implement the feature, you collect the revenue, you fight the lawsuits, and when the legal cause finally outweighs the business benefit, you quietly reverse course and hope no one notices the timeline. The second piece of evidence came from former Meta Vice president of Partnerships Brian Boland, who testified that he absolutely did not believe that safety was a priority to Mark Zuckerberg and then COO Sheryl Sandberg when he left the company in twenty twenty. This is not a disgruntled entry level employee. This is a vice president, a senior executive, someone who sat in the rooms where those decisions were made. His testimony, safety was not a priority to the people running the company. And then there was the Arturo Bijar testimony. He testified in both the New Mexico and the Los Angeles proceedings, the former engineering director who found out his own fourteen year old daughter had received sexual solicitations on Instagram while he

14:21 was working there. He went to leadership, he raised the alarm, he documented it, He eventually left. He said, the algorithm is very good at connecting people with interests, and if your interest is children, it will connect you with children. Nobody was paying attention to her. The damages math, the jury awarded three hundred seventy five million dollars. New Mexico had sought closer to two billion dollars. The three hundred seventy five million dollar figure is the statutory maximum five thousand dollars per violation, which is actually a telling detail about the gap between how consumer protection we're written and the scale of harm that's possible when a company with a billion users violates them. But here's the thing about three hundred and seventy five million dollars for a company with a one point five trillion dollar market cap. Accountability doesn't have a legal department, but Meta does a very very good one. They're appealing both verdicts. They'll argue the damages.

15:24 On appeal, they'll argue the legal theories. They'll write a check that is to their balance sheet what a parking ticket is to a middle class family, and they'll call it a cost of doing business. The New Mexico case isn't over either. There's a second phase beginning May fourth, in which a judge will decide whether Meta created a public nuisance and whether they should be required to fund programs addressing those harms. The AGE is also asking for mandatory platform changes, effective age verification, removal of predators, protection of miners from the encrypted communications that Meta itself said would shield bad actors. Those are the asks. We'll see what the judge orders. Two verdicts, two states, one week, and I want to be honest about what they mean and what they don't what they mean. A legal theory that was considered a long shot five years ago that social media platforms can be held liable as defective products for the harm they cause, has now been validated by actual American juries. Not legal scholars, not congressional committees, not op ed writers. Juries regular people who sat through weeks of evidence and heard the executives testify and saw the internal documents and said, yes, liable. That matters because the two thousand other cases waiting in line just got a roadmap.

16:56 The legal framework that worked for Kaylee in Los Angeles is now the play book for every plaintiff's attorney in the country. Eight more individual cases are set to go to trial in Los Angeles alone. A federal trial involving consolidated cases from school districts and state attorneys general across the country is scheduled for this summer in the Northern District of California. This summer, not someday, this summer, and every one of those cases will walk into that courtroom with the la verdict in the file. The big Tobacco comparison. Everyone is using this phrase big tobacco moment. I want to be specific about what that means, because the comparison is instructive, but it's also a warning about how long this takes. The legal campaign against tobacco companies began in the nineteen fifties. The first successful state lawsuit, the one that mattered, the one that broke the dam, was in nineteen ninety four. The two hundred and six billion dollar Master settlement with forty plus states happened in nineteen ninety eight.

18:00 From first lawsuit to real accountability forty years and what did that accountability produce? Mandatory warning labels, advertising restrictions, a decline in smoking rates, real measurable change. But it took decades of litigation, billions of dollars in legal fees, and the death of millions of people before the industry was forced to change. Social media has an advantage tobacco never had. The product is free, It's on every device, and the children using it have been using it since before they could read. Tobacco had to find a way to get cigarettes into the hands of teenagers. Instagram was already in their bedrooms. So when people say big tobacco moment, what they mean is the dam has cracked. What they don't say is the dam may take another decade to break completely.

18:49 And in that decade, more kids will be on the platforms, more algorithms will be running, more beauty filters will be showing fourteen year old girls what their faces would look like after surge. The congressional failure, I am not going to let Congress off the hook here because while juries in Los Angeles and Santa Fe were doing the work Congress was supposed to do, Congress was doing nothing. The Kids Online Safety Act has been floating around Capitol Hill in various forms for years. It requires tech platforms to provide meaningful safeguards for minors. It has bipartisan support, which in the current environment is remarkable enough to mention. It is past committee, it has not become law. Senator Marsha Blackburn said after the verdict that Congress should enshrine protections for American families into law by passing KOSA. Senator Ed Markey said, we cannot rely on the courthouse alone. Both senators are right. Both senators have been right for years.

19:51 The bill is not moved in the meantime. Australia banned social media for children under sixteen in twenty twenty four. Malaysia, Spain, and Dena considering similar laws. The United States, home of Meta and Google and TikTok, home of the company is doing the most damage, has produced no federal law. We're litigating it one child at a time in civil court. That's not a system. That's an abdication. What Meta is going to do next. I'll tell you what Meta is going to do, because there's a playbook for this, and it runs exactly the same way. Every time. They're going to appeal both verdicts. They've already said so, same statement both times, we respectfully disagree and will appeal. Appeals take years.

20:40 During those years, the company continues operating exactly as before. They're going to announce new safety features, teen accounts, new parental controls, age verification improvements, all real things that cost them real money, and engagement, all things they will announce with press releases and congressional testimony, All things that their own internal research has already told them make little impact. They're going to point to the dollar amounts. Six million dollars is a tiny number. Three hundred and seventy five million dollars is a larger number. That is still a rounding error, they'll argue, and they're not wrong that the damages are not enough to change the business math. The revenue from keeping children on the platform exceeds the cost of the litigation. Until that flips, nothing structurally changes what actually changes the math. If the federal trial this summer produces verdicts in the billions, If the two thousand pending cases produce a master settlement like tobacco. If Congress passes a law with real teeth, not safe harbor language that the platform's legal departments can drive a truck through. Here's the honest assessment. This week was significant. This week was a real crack in the wall. But three hundred eight twenty one million dollars is not accountability for a one point five trillion dollar company. It's a down payment on accountability.

22:07 The bill is still coming. That's Daily Crime and Justice. Monday, March thirtieth, twenty twenty six. Two American juries in two states in two days. Looked at the evidence, heard the executives, and said Meta harmed children and Meta knew it. Six million dollars in Los Angeles, three hundred and seventy five million dollars in New Mexico. Appeals already filed, two thousand cases still waiting a federal trial this summer, and a Congress that has not managed to pass the Kids Online Safety Act. Kaylee started on YouTube at age six. She is twenty years old now. She sat in a Los Angeles courtroom and watched a jury of her peers tell her that what happened to her, was real, was caused by deliberate design decisions, and was wrong. She showed little emotion when the verdict was read. I don't blame her.

23:02 She knows the appeals are coming, she knows the blue eminem doesn't hurt them. But she also knows something else. Now a jury said her name. Twelve people listened to her story and believed her. Someone had to say her name. Do better,