The Journal. - The New Legal Strategy That Beat Social Media

Episode Date: March 30, 2026

Get your tickets to our L.A. live show here! In a landmark case, a 20-year-old woman just beat Meta and YouTube in court. WSJ’s Erin Mulvaney explains how a new legal strategy got around a decades-old legal shield for social media companies, and how Big Tech could end up like Big Tobacco. Jessica Mendoza hosts.  Further Listening: - In a Landmark Trial, Zuckerberg Takes the Stand - The Battle Within Meta Over Chatbot Safety Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

For decades, social media companies have operated under the protection of a powerful legal shield. If something harmful shows up on their platforms, like harassment or dangerous content, the companies themselves aren't liable. That shield made social media giants virtually untouchable in court, until last week. In a Los Angeles courtroom, a 20-year-old woman took on meta and YouTube. She claimed that the platforms harmed her mental health. And she won. Not by breaking through the shield, but by going around it. This case took a totally different route.

Our colleague Aaron Mulvaney covers legal affairs. In this case, she says, didn't focus on the content on these platforms. It focused on how the platforms were made. The way they designed the products. So that would be the algorithms used to attract people, things we know about like the infinite scroll or notifications that can lead to dopamine hits for kids and things like that. And the plaintiff's argument was simple.

If a product's design can cause harm, the platform maker should be held responsible. I think it was a creative theory. It hadn't really been tested before. Right, until this verdict. What could this outcome mean for meta and YouTube? That could mean that these companies will be forced to look at how they design their products, how they operate. And for us, that would mean how we interact with it and how we use it.

So this is sort of just the beginning? I think it's the beginning. I mean, this was a loss, and they're going to have to think about what down the line this could mean for their products. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Monday, March 30th. Coming up on the show, the verdict that could fundamentally change social media as we know it.

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This landmark social media case started with one person, the plaintiff. So she's referred to you as Kaylee GM in court documents to protect her identity. So I'll call her Kaylee. So Kaylee is a now 20-year-old young woman. who has a lot of mental health struggles in her life, and pretty much no one was disputing that she's had a hard go of it, including the social media companies. But she has been a prolific user of many of these products growing up.

Kaylee testified that she started watching YouTube videos when she was six years old. Before she turned 10, she had uploaded over 200 videos to the platform. Before she turned 15, Kaylee had created more than a dozen accounts on Instagram, which Meta owns. Her lead attorney said that on one day, Kaylee spent 16 hours on Instagram. So that was the connection to how her persistent social media use led to a lot of her mental health struggles that she has today. Kaylee claimed that years of using these platforms worsened her depression and her body dysmorphia and contributed to thoughts of self-harm. On its face, this is the kind of case that should be hard to win. Because of that legal shield that's largely protected social media companies up till now.

It's called... Section 230. Section 230. Section 230 of the Communications Decency Act. The law was passed in 1996, long before Instagram, before YouTube, before Infinite Scroll. For better or worse, it paved the way for the modern Internet. largely that law provides some immunity for internet companies for third-party content. The idea was that it would give the companies the freedom to grow and not be restrained by the fear of liability and kind of allow for freedom of expression.

At the same time, the creation of Section 230 also raised a question. If a platform couldn't be held liable for things people post, Is there any way a platform could be held accountable? Kaylee's legal team thought so, and they came up with a novel strategy. Don't think of meta and YouTube as spaces that host content. Think of them as products. If you can sue a car company for a faulty airbag

or sue a toy company over lead paint, why not an app for how it's designed? So in a way, it's a simple, straightforward product liability case that you'd see against any kind of company that harms someone. But in this case, it was social media companies and how they designed their products. So that was a different angle to get at blaming them for the harm that kids have from these tools. What was the defense from the social media companies? First of all, they did try to get this case thrown out and not even go to trial by arguing Section 230.

And they still are trying to fight for that in some of the federal litigation. But they do make a point and they present research and evidence that There are so many things that go into mental health. It could even be genetics. It could be the school district. It could be parental supervision. There are a lot of things. So they kind of argued that there's not a direct link that says social media is the reason this happened to this woman.

YouTube argued that Kaylee didn't spend enough time on the platform to be addicted. Lawyers for Meta pointed to Kaylee's turbulent childhood. She'd been bullied at school. and her sister had been hospitalized for an eating disorder. Was it fair to pin so much of her struggles on social media? During the trial, some big names took the stand, including meta-CEO Mark Zuckerberg and the head of Instagram, Adam Masseri. Maseri pushed back on the idea of social media addiction,

calling it, quote, problematic usage. So I can see what they're saying here, right, kind of making this an issue more of personal responsibility and impulse control. How did Kaylee's lawyer, Mark Lanier, push back on that? Yeah, so Mark Lanier is a famous trial attorney. He is based in Texas, and his style is theatrical. He uses props. And in this case, Lanier walked into the courtroom with some baked goods.

So he showed a cupcake. A cupcake and a tortilla, to show how social media can exacerbate other issues. The visual was a flat tortilla versus a rising cupcake. I don't know if a cupcake would necessarily be representative of a bad thing, but he was explaining there's something that makes something rise and makes it grow the cupcake. And it's the leavening. And that's what social media does. These issues aren't as bad. It's only flat without this element. That's what the jury had to decide. Were Kaylee's struggles due to a whole confluence of issues, as the social media companies argued, or did these apps and their features meaningfully make Kaylee's struggles worse?

In the end, the jury sided with the plaintiff. A jury found tech giants meta and Google liable for failing to warn its users about the dangers of their social media platforms. The jury took eight days to deliberate this case. What did you hear about what happened during deliberations? So my colleague actually did have the opportunity to speak with a couple jurors, and one of the jurors that we quoted, she mentioned specifically Mark Zuckerberg was testifying, and she said she and some of her other peers found that he came off somewhat disingenuous and wasn't being consistent. So she specifically mentioned the executive's testimony. Didn't quite work for her. After the verdict, a meta spokesperson said, quote, we will continue to defend ourselves vigorously, as every case is different,

and we remain confident in our record of protecting teens online. A spokesman for Alphabet's Google, which owns YouTube, said it disagrees with the verdict in the California case. Both Meta and YouTube said they plan to appeal. In total, Kaylee was awarded $6 million from both Meta and YouTube, with the lion's share coming from Meta. The jury found Instagram was more addictive, and harmful to her. Very obviously, I think anyone would agree that $6 million is pretty good money

for a person, but that's not very much for a company like META or YouTube. Right. Meta made something like $60 billion with a B.E. in profit just last year, and that's just meta, right? Yeah, that's exactly right. Still, Aaron says the case was about more than just one payout. It was about whether or not the legal argument the plaintiffs made was winnable. The idea that this argument can work really signals that this legal strategy will be persisting for what we know is thousands of other similar cases that are also moving forward and that finding is bigger than the actual money. The bigger picture is that social media companies have to be thinking about what to do if they keep losing these cases. If they continue to lose these cases, if they continue to lose these

arguments, there will be a question of how all internet companies really operate online and it'll affect user engagement and how they present these things to the world. It's pretty existential to their business model. And there is a precedent for verdicts like this to spark a chain reaction and turn a major industry on its head. This is being called the big tobacco moment for social media. That's after the break. This episode is brought to you by IG Private Wealth. When your financial life gets more complex, having a clear plan matters. IG advisors build personalized, integrated financial plans that connect your investments, tax strategies, retirement income, and estate planning into one coordinated plan.

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The all-electric ID4. You deserve more fun. Visit vw.ca to learn more. S-U-V-W, German-Engineered for All. An industry that made products that got people hooked, the targeted teens, that saw internal reports about safety concerns and kept going anyway, prompting a wave of litigation. This wasn't social media in 2026.

This was big tobacco in the 1990s. Yes or no. Do you believe nicotine is not addictive? I believe nicotine is not addictive, yes. Mr. Johnson. Congressman, cigarettes, and cigarettes, nicotine clearly do not meet the classic. What happened in the 1990s with the tobacco industry was pretty transformational because people smoked cigarettes and if they got lung cancer for a long time, the tobacco companies

were able to say that's their personal choice. They smoked, you know, and they got addicted and that's not our fault. And there was similar litigation, accusing big tobacco of hurting people and, like, adding to the public health crisis. The key there was that they knew the products were dangerous. Internal company documents showed that tobacco companies had known for years that nicotine was addictive. Through litigation, tobacco companies were held liable for harming consumers, leading to the biggest settlement in U.S. history at the time. The Attorney Generals have now before them a tobacco settlement proposal that would provide the states with $206 billion through the year 2025. That led to a big settlement, but also required these companies to make big changes about how they operate.

They had to pay a lot of money for anti-smoking campaigns. And then on top of that, they had to change a lot about how they marketed things. There will no longer be billboards. There will no longer be Joe Camel. There will no longer be the Marlboro Man. An example would be putting cartoon characters on their products. The Marlborough Man has just written out of town on Joe Camel. And there was a fall off of young people who were buying cigarettes.

In the aftermath, the industry began to shrink. In 1990, cigarette companies sold more than 500 billion cigarettes a year. By 2022, that was down nearly 70%. Obviously, cigarettes are still part of the world today. There are still smokers, but the thought there is if you get people young, they stay smokers forever. It sounds familiar. Yeah, right. During the social media trial in L.A., the plaintiff's attorneys leaned into internal research from META.

Those documents noted that Instagram said, quote, we make body image issues worse for one in three teen girls, and that meta executives had known about potentially harmful effects of their products on children and moved forward anyway. Meta said the attempt to blame teen mental health on social media companies, quote, oversimplifies a serious issue. So going back to the analogy with big tobacco, I mean, are there limits to this analogy?

Because, like, you know, cigarettes are chemically addictive? Can the same argument be made for using social media? The plaintiffs are actually arguing that, and they're arguing that these companies knew of the dangers of how they were trying to keep their customer base. They were trying to keep these young users engaged. There were specific things in these documents about how your brain is spiked by dopamine, by notifications or the scroll, and that would keep you engaged in it. Kind of like nicotine.

But there are key differences. It's hard to know what will happen because there's still so much uncertainty about how this will shake out. In the end, it wasn't just lawsuits that forced change in the tobacco industry. Cigarette companies were also pushed by regulators to change how they marketed their products.

Federal agencies required those companies to be more transparent about the dangers of smoking. The question is, could social media platforms end up facing the same kind of pressure? It's certainly been talked about in Congress, and it was a renewed conversation because of this litigation, and that's an ongoing discussion. I think that for now, the way this is being determined is in the courts, and I think both sides would say it's a somewhat inefficient way to do this, but there have been calls for reforms of Section 230 and pushes to require

companies to have more built-in features that protect people. Kaley's Landtrak. case against social media companies wasn't the only big court decision last week. Meadow was hit with a double whammy. The day before the Los Angeles verdict, a jury in New Mexico ruled against them in a separate case. They found that Meta failed to protect children from predators on its platform. A company spokesperson says that Meta disagrees with the verdict and that the company plans to appeal, saying, quote, we remain confident in our record of protecting teens online. Within the past couple years, companies like Meta and YouTube have rolled out teen accounts with more safety protections, stronger parental controls, content filters, and screen time reminders.

One thing that you sort of alluded to earlier, you know, in the wake of those tobacco lawsuits, there was a bigger cultural shift about how the public thinks about smoking. You know, you can't smoke indoors anymore and pretty much anywhere in the U.S. Do you foresee something similar are happening for social media in terms of a cultural shift as a result of these cases? I do think there's a growing concern and awareness around social media as it becomes so much more prevalent, especially in young people's lives. And I won't leave adults out of it either, but it's clearly a big part of the way young people experience socialization and culture. So I think a lot of parents are already concerned, and there's a lot of research and debate

about this. It's possible that these cases will at a minimum draw attention to some of these struggles if it hasn't been a question in their mind. But, you know, the companies themselves do now, I believe, have an incentive to think about the safety features they offer. So if you're a big tech company, like, what are you sweating about right now? I think these lawsuits are based on very sad set of fact. you know, and they wouldn't dispute that these are heartbreaking stories and struggles that you wouldn't want any young person to experience. And liability for those not only hurts their brands, but could ultimately hurt their bottom line

if they're forced to completely change their business model, which is to draw and engage users. So I think that they're closely watching this. One of the meta attorneys said, we'll keep talking about this for years, you know, and I think that's probably true. That's all for today, Monday, March 30th. The Journal is a co-production of Spotify and the Wall Street Journal. Additional reporting in this episode from Megan Babowski, Laura Nelson, and Eric Schwartzel.

Thanks for listening. See you tomorrow.