Mark Lanier, the folksy Texas litigator who is also a part-time pastor, held up a jar of M&Ms in front of the Los Angeles jury and told them that each represented $1 billion of Meta’s market capitalization. According to those calculations, there were approximately 1,400 candies in the jar. The jury awarded his client six of them. The question now haunting Silicon Valley is what will happen when the other jars begin to empty.
On Wednesday, March 25, A California jury found Meta and Google liable in all respects in the first landmark trial to test whether social media platforms can be treated as defective products, designed, like a defective car seat or a contaminated medicine, to cause harm. The plaintiff, a 20-year-old woman identified only as KGM and referred to by the court as Kaley, told jurors that she had started using YouTube at age six and Instagram at age nine, and that the platforms had amplified her personal struggles into body dysmorphia, depression and suicidal thoughts. After nine days of deliberation, 43 hours in total, the jurors agreed.
The damages were modest by Big Tech standards: $3 million in compensatory damages and $3 million in punitive damages, split 70-30 between Meta and Google. Meta’s stake amounts to $4.2 million against a company whose market capitalization at the time of the verdict amounted to approximately $1.4 trillion. But the financial importance of the ruling lies not in what was awarded but in what it unlocked. More than 10,000 individual cases and nearly 800 school district claims are pending in federal multidistrict litigation, with eight more high-profile trials scheduled for the coming months. The verdict establishes, for the first time, that a jury will accept the legal theory that social media applications should be treated as products whose design is inherently defective.
The ruling came a day after an independent jury in Santa Fe, New Mexico, ordered Meta to pay $375 million in civil penalties, $5,000 per violation, after finding that the company had violated state consumer protection laws by allowing child sexual exploitation on Facebook and Instagram. New Mexico became the first state to prevail in a lawsuit against a social media company over child safety issues. Evidence presented during that six-week trial included internal Meta documents and testimony from former employees establishing that the platform’s design features had allowed predators to target minors. A trial on the state’s remaining claims against Meta is scheduled to begin on May 4.
The 💜 of EU technology
The latest rumors from the EU tech scene, a story from our wise founder Boris and some questionable AI art. It’s free, every week, in your inbox. Sign up now!
The back-to-back verdicts caused Meta shares to suffer their steepest decline in more than two years. The stock fell 6.8 percent the day after the Los Angeles verdict, continued to fall to an 8 percent drop the next day, and ended the week down 11 percent. By the end of the month, Meta had fallen 19 percent, having lost approximately $310 billion in market value. Analysts at JPMorgan and Goldman Sachs began revising their price targets, citing what they described as unquantifiable tail risk stemming from the cascade of litigation now using the verdict as a model.
Within Meta, the verdict is seen as a disappointment rather than a crisis, at least publicly. The company had entered the trial confident in its position, arguing that Kaley’s struggles with family and school predated her use of Instagram and that Reduce something as complex as adolescent mental health to a single cause. ran the risk of leaving broader issues unaddressed. A spokesperson told the BBC that many teenagers rely on digital communities to find belonging. Meta said it would appeal and gave no indication it would resolve future cases or alter its product design.
Google took a different tack, arguing that YouTube had been mischaracterized at trial. YouTube is “a responsibly built streaming platform, not a social media site,” the company said, a distinction the jury evidently did not find compelling. Both companies will have a chance to refine their legal arguments as the lead program continues, but the evidentiary record from Kaley’s trial, including internal documents in which Meta executives discussed efforts to attract and retain young users, can now be recovered in subsequent proceedings.
TikTok and Snapchat parent company Snap Inc had been co-defendants in the case, but reached a settlement before the trial began. The settlement amounts remain undisclosed and neither company admitted liability, but the decision to settle its exposure before a jury could weigh in suggests its legal teams reached a different calculation than Meta. Both companies remain defendants in several upcoming landmark lawsuits.
The broader implications extend far beyond damages in court. Eric Goldman, associate dean and law professor at Santa Clara University, told the BBC that he saw cases of social media addiction as a potentially existential threat to the industry’s current business model. The social media industry, Goldman wrote after the verdict, “faces existential legal liability and will inevitably need to reconfigure its core offerings if it cannot obtain broad relief on appeal.” Former Twitter executive Bruce Daisley put the structural problem more directly: Two decades of growth had produced companies “geared toward trying to force people to spend more and more time” on their platforms, and any regulation or litigation that threatened that engagement model became an issue. A problem that must be neutralized through lobbying and public relations..
The legal reckoning comes at a time when the tech industry’s relationship with regulators is already under severe strain. Australia’s social media age ban, which came into effect in December 2025, has led to enforcement action against five platforms for non-compliance. The Digital Services Law and the European Union AI Law are impose new obligations that many companies have struggled to meet. The NIS2 Directive has expanded the regulatory scope of cybersecurity in eighteen sectors. And the US Congress, where Meta CEO Mark Zuckerberg met with Senate Majority Leader John Thune on the day the verdict was announced, continues to weigh federal legislation on age verification and platform liability.
What distinguishes litigation from the regulatory push is that juries, unlike legislators, do not negotiate. They decide. And last week in Los Angeles, twelve citizens decided that the products Meta and Google built were defective, that the companies knew they were defective, and that a young woman was harmed as a result. The $6 million fine is a rounding error for companies worth More than the GDP of most countries.. Legal precedent is not.
As Kaley’s lawyer, Jayne Conroy, told the BBC after the verdict: Right now there is There is a lot of math in boardrooms. and Meta, Google, Snap and TikTok.
