A federal judge in California has ruled that Meta Platforms (META) must face lawsuits by U.S. states accusing the company of addicting teens to social media.
U.S. District Judge Yvonne Gonzalez Rogers rejected a bid by Meta, which runs social media platforms such as Facebook and Instagram, to toss out a lawsuit filed by U.S. states accusing the company of encouraging social media addiction among American teenagers.
Judge Gonzalez Rogers allowed the claim by a total of 30 U.S. states to proceed largely as it was originally filed, and rejected Meta Platforms assertions that it cannot be held liable for social media addiction, or even what defines addiction to social media platforms such as Instagram.
Cracking Down on Social Media Companies
The states that filed the claim against Meta Platforms are asking the court for injunctions against the company’s various social media sites and seeking unspecified monetary damages. Meta is the latest company to be hit with legal action over social media addiction.
Lawsuits have also been filed against privately held ByteDance’s TikTok site and Alphabet’s (GOOGL) YouTube channel, accusing those companies of creating algorithms that addict teens and cause them to experience anxiety, depression, and body-image issues.
Some of the lawsuits claim that the technology companies involved failed to warn the public of the risks associated with social media platforms. However, some healthcare professionals and market analysts dispute whether social media addiction is real and a credible threat to adolescents.
META stock has gained 83% over the last year.
Is META Stock a Buy?
Meta Platforms stock has a consensus Strong Buy rating among 47 Wall Street analysts. That rating is based on 42 Buy, four Hold, and one Sell recommendations made in the last three months. The average META price target of $621.71 implies 6.04% upside from current levels.
