Meta has been sued by dozens of U.S. states that accuse the company of offering products with addictive features that are harmful to young users. Meta stock slipped Tuesday following reports of the lawsuit.
The lawsuit filed Tuesday in federal court in Northern California argue that Meta, through Instagram and Facebook, "has harnessed powerful and unprecedented technologies to entice, engage, and ultimately ensnare youth and teens." Meta has "profoundly altered the psychological and social realities of a generation of young Americans," the suit also said.
The California-based legal challenge includes 33 state attorneys general. Eight other state law enforcement officials are bringing similar cases in their home states, California Attorney General Rob Bonta said in a statement.
Meta said the tech giant was "disappointed" with the legal action.
"We share the attorneys general's commitment to providing teens with safe, positive experiences online, and have already introduced over 30 tools to support teens and their families," a Meta spokesman said in an email. "We're disappointed that instead of working productively with companies across the industry, the attorneys general have chosen this path."
The lawsuit also accuses Meta of violating the law by collecting data on users under 13 without parental consent. Bonta said the suit was the result of a multiyear investigation.
"In seeking to maximize its financial gains, Meta has repeatedly misled the public about the substantial dangers of its social media platforms," the lawsuit said.
State officials are also asking the courts to bar Meta from offering product features they say post a danger to young users.
Meta Stock Falls
Meta stock fell into negative territory on the day shortly after first reports of the lawsuit, at around 11:30 a.m. ET. That knocked out gains from earlier on the stock market today. Meta shares closed down a half-percentage point at 312.55.
Helped by recovering digital ad sales, Meta stock has been a top performer in the S&P 500 this year, with a 160% gain.
But that growth has come despite growing regulatory headaches. Notably, the European Union hit Meta with a $1.3 billion fine in May for violating its data regulations.
Meta reports third-quarter earnings after trading closes on Wednesday.
