Meta's Court Defeat Opens New Legal Path for AI Industry Lawsuits Over Harmful Design

Meta's Big Court Defeat Has Huge Implications for Lawsuits Against the AI Industry

Can't-miss innovations from the bleeding edge of science and tech Tech giants Meta and Google-owned YouTube suffered a devastating legal blow yesterday after losing a landmark social media addiction trial, a watershed outcome that's likely to reverberate across the social media industry -- and shrapnel from that fallout could hit AI companies, too. In the case characterized by some as Big Tech's "Big Tobacco moment," a jury found that Meta and YouTube caused a young woman to develop suffer life-altering mental health impacts as a direct result of using the companies' platforms. Crucially, the case didn't stake its claims on the nature of the user-generated content that the then-teenaged plaintiff encountered on the social media sites. It instead pointed to specific design features -- infinite scroll, beauty filters -- baked into the platforms themselves, arguing that it's these company-created elements that fostered harmful, addictive products. Basically, the case put the saying "it's a feature, not a bug" on trial. And a cohort of American consumers, siding with the plaintiff, determined that the platforms are defective products, distributed to the public without proper safeguards or warnings about their potential harms. Meta and YouTube have both vowed to appeal and defended their platforms' safety. But as those appeals work their way through the court system, the same core argument is currently being tested against the latest buzzy technology: AI. As it stands, three AI companies -- ChatGPT creator OpenAI, Gemini maker Google, and the Google-tied AI companion platform Character.AI -- are facing a stack of high-profile consumer safety and wrongful death lawsuits stemming from users' experiences with the ventures' various human-like chatbots. The cases involve both minor and adult users of chatbots, and the alleged user outcomes vary. Some of the suits claim that anthropomorphic chatbots, while engaging with users as platonic and romantic companions, acted as potent suicide coaches, helping teenagers and adults alike write suicide notes and plan their deaths. Other suits claim that chatbots led users into delusional spirals, resulting in destructive mental health crises and psychological harm; some of these cases, too, have resulted in deaths, as well as reputational damage, financial ruin, alienation from loved ones, and hospitalizations. Character.AI has so far settled one of the multiple lawsuits it's fighting, all of which concern minor users. OpenAI is battling more than a dozen different death and harm suits, including one centered on a tragic murder-suicide allegedly spurred by ChatGPT reinforcing an unstable man's paranoid delusions. And Google -- which has also been named in the Character.AI lawsuits for its role in funding the smaller platform -- continues to fight cases related to Character.AI, and was separately sued over the death by suicide of an adult user for whom the product allegedly set a suicide timer. But while the human users of the bots and the outcomes they and their families say they suffered are diverse, the fundamental argument across cases is more or less the same. The AI companies, the lawsuits collectively allege, acted recklessly. They pushed to release underbaked and unsafe products to the public for the sake of market gain, and made intentional design choices -- in AI's case, these are features like the bots' anthropomorphism, or their human-like attributes -- that kept users engaged with the platforms despite the harm to their well-being. At their core, these cases are centered on allegations of corporate negligence and how tech products are built, by humans, to function. And as of yesterday, such claims constituted a winning argument against social media titans. In response to the lawsuits, the AI companies have generally offered condolences to families while defending their products and safety efforts. Character.AI and OpenAI have both made changes to their platforms in the wake of litigation, with both companies instituting parental controls and OpenAI assembling a panel of health experts. The industry remains effectively self-regulated, however. Meanwhile, on the content side, potentially complicating things even further for the AI labs is the reality that these cases don't really deal with users engaging with user-generated content, as is generally the case with social media sites; these cases are about users' relationship with AI output generated by the platform itself. (In the case that was settled, Character.AI initially tried to argue that its chatbots' outputs were protected speech, but a judge swatted that down.) Some of the lawyers leading legal efforts against AI companies certainly see the Meta and YouTube outcome as a bellwether for the chatbot suits. To wit: in a statement following news of the social media decision, the Tech Justice Law Project (TJLP), a legal nonprofit that's been a driving force in cases against Character.AI, Google, and OpenAI, declared that "when companies make intentional decisions about how products are built, they must be held responsible for the foreseeable consequences of those choices -- whether those companies are social media platforms or building AI products." Meetali Jain, TJLP's director, added that the decision "makes clear" that "Americans can plainly see that tech corporations are making specific design choices about their tech products that are harming our communities to benefit their bottom line." "Regardless of the specific tech product," Jain continued, "it is these choices and their resulting impacts that tech corporations must be held accountable for."

Why this week's social media verdicts could finally hold tech giants to account

Mary Cunningham is a reporter for CBS MoneyWatch. She previously worked at "60 Minutes," CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program. Back-to-back verdicts this week against Meta and YouTube could usher in a new chapter in accountability for tech companies, while opening the door to fresh legal challenges, experts tell CBS News. Two cases, decided in New Mexico and California, are the first to hold social media companies liable for harming young people. On Tuesday, a New Mexico jury ordered Meta to pay $375 million in civil penalties for failing to protect young users from predators and misleading them about the safety of its apps. In a separate verdict issued Wednesday in Los Angeles, a jury ruled that Meta and YouTube were negligent in how they designed and operated their platforms, resulting in mental health harm to the plaintiff, a 20-year-old named Kaley, or "KGM." Jurors in that case ordered the companies to pay a total of $6 million in damages. Meta and YouTube told CBS News they disagree with the verdicts and are planning to appeal. While the ultimate impact of these cases remains uncertain, experts say the mounting legal and public pressure could portend major changes in how companies design their apps, deliver content and integrate safety features into their platforms. That would mark a victory for American parents, a majority of whom support stricter restrictions on their children's social media use. The verdicts could also set the stage for how thousands of similar cases -- brought by individual plaintiffs, state attorneys general and school districts -- play out. "This is a watershed moment," said J.B. Branch, the AI governance and technology policy counsel at Public Citizen, a consumer advocacy organization. "This is the crack that could potentially open the floodgates to some accountability that Americans have been looking for." These rulings could reshape tech accountability in several ways, experts say. Internet companies have long been protected by Section 230 of the 1996 Communications Decency Act, which shields them from liability for third-party content posted on their platforms. However, lawyers in the Los Angeles case took a new tack by focusing on product liability, arguing that Google and Meta's design and operation of their platforms caused addictive behavior and harm. "This is the first time that anyone has won a judgment against these companies for the very design and the features, as opposed to what other people post," Devorah Heitner, a researcher who studies young people's relationship with technology, told CBS News in an interview. Legal experts anticipate an increase in product liability cases against social media companies after the Los Angeles trial showed that the legal theory resonated with the jury. "I believe this is the path forward," said Matthew Bergman, the founding attorney of the Social Media Victims Law Center. Bergman's firm represented Kaley and has filed 1,500 other cases on behalf of families who say they were adversely impacted by social media in some way. In addition to social media platforms, this week's verdicts could also put artificial intelligence tools developed by big tech companies under the microscope, especially if product liability arguments gain traction. Companies like OpenAI and Anthropic have rolled out AI-powered chatbots at lightning speed in the last few years. But some argue that the rush to get into the market has come at the expense of safety. Multiple families have filed lawsuits alleging that AI chatbots were responsible, or played a role, in their loved ones' suicides. "We are indeed in a new era of Internet law litigation," Jess Miers, an assistant professor at the University of Akron School of Law, told CBS News in an email. "We can and should expect the majority of cases against online services (and now generative AI companies) to be product liability cases." Social media companies, including Meta, are facing thousands of other lawsuits alleging that their platforms caused harm, including from dozens of state attorneys general. Individual plaintiffs and school districts have also filed litigation against the tech giants. Because thousands of families have filed similar lawsuits, KGM and a handful of other plaintiffs have been selected for bellwether trials -- essentially test cases for both sides to see how their arguments play out before a jury, eventually leading to a broader settlement reminiscent of the Big Tobacco and opioid trials. Bergman said a group of cases that have been consolidated in California state and at the federal level are "currently awaiting outcomes of these bellwethers to determine whether there's a path to a negotiated resolution, or whether trial is in the works." In addition to influencing the body of existing cases, Bergman said these verdicts could embolden more children and their parents to come forward, opening the door to more litigation against big tech companies. "I think there are many families that have been afraid to take on big tech despite the injuries that their children have sustained," he said. "It is our hope and expectation that this verdict will assuage their reluctance and encourage them to seek the same kind of accountability that they would seek if their child were injured by any other dangerous product." As part of the Los Angeles trial, Meta and YouTube were ordered to pay damages, but were not required to make any specific changes to their platforms. However, legal experts say the decision could compel social media companies to reconsider their app designs and how they deliver content in order to insulate themselves against future liability. Clay Calvert, nonresident senior fellow in technology policy studies at the nonpartisan American Enterprise Institute, said he expects the pressure will only mount if the recent cases are held up on appeal and if other pro-plaintiff verdicts follow. The changes could uproot some of the central components of apps, including the algorithms that decide what types of content users see in their feeds, experts tell CBS News. Companies could also move to limit screen time, provide warnings to children who use the apps as well as their parents and introduce stricter age verification rules. "These trials are likely to result in changes to endless scroll and changes to the algorithm, potentially for everyone," Heitner said.