Meta and YouTube Lose Landmark Social Media Trial

SPEAKER_1 (0:00)

With Venmo Stash, a toggle on one hand and ordering a ride in the other means you're stacking cash back. With Venmo Stash, get up to 5% cash back when you pick a bundle of your favorite brands. Earn more cash when you do more with Stash. Venmo Stash terms and exclusions apply. Match $100 cash back per month. See terms at venmo.me slash stash terms.

Alex Ossola (0:18)

A landmark decision in California, where a jury finds Meta and YouTube negligent and says the way their apps are designed hurts kids. Plus, after more than a decade of rampant violence and crime, Venezuela is starting to feel safer. We get into why.

Kejal Vyas (0:33)

Around 10, 15 years ago, streets were so barren at night. People couldn't go out. You'd call a taxi just to go a few blocks. People were very, very scared of being robbed, mugged, kidnapped. It's really one of the most remarkable changes.

Alex Ossola (0:48)

And security lines at airports are growing. One company is a clear winner. It's Wednesday, March 25th. I'm Alex Ossola for the Wall Street Journal. This is the PM Edition of What's News. The top headlines and business stories that move the world today.

In Los Angeles, a jury ruled today that Meta, which owns Instagram and Google's YouTube, were negligent for operating products that harmed kids and teens and failing to warn about those dangers. The jury ordered the companies to pay $6 million in damages. The decision comes just a day after another verdict in New Mexico that found Meta liable for failing to protect young people from online dangers. On that decision, Meta said it would appeal. For more on the outcome of the Los Angeles trial, I'm joined now by WSJ Tech reporter, Meghan Bobrowsky. Meghan, what does today's verdict mean for the two companies in question, Meta and YouTube?

Meghan Bobrowsky (1:44)

Meta has lost two cases in the span of two days accusing them of social media harms towards children and being responsible for the design of their apps. So this is a landmark case. Both these cases had financial penalties attached to them. And so in the case yesterday, Meta was ordered to pay $375 million. For reference, that is one one sixtieth of the revenue they made in the last quarter. So a very, very small amount of the money they actually made. What these cases are really about is about setting precedent that these companies are not shielded by Section 230 as much as people might have thought they've been.

Alex Ossola (2:27)

To remind listeners, Section 230 is part of a 1996 communications law that's been really important for internet companies. It's broadly protected them from being held liable for things like the videos and other posts on their platforms. So Meghan, what does this verdict mean for social media companies? Will they have to change their business practices?

Meghan Bobrowsky (2:45)

This is all happening in real time. There are thousands of other cases similar to these ones that are going to trial in California. And so at a certain point, if they're losing these cases, do they keep going to trial with these, right? Or do you settle, make changes, and do something else? That's sort of what we're looking to see here, is what the fallout is from this.

Alex Ossola (3:09)

That was WSJ Tech reporter Meghan Bobrowsky. Meta and Google say they plan to appeal.

In California, a battle is underway over a proposed billionaire tax. We've talked before on the show about a ballot measure that would impose a one-time, 5% wealth tax on billionaires. And the billionaires are fighting back with ballot measures of their own. And unsurprisingly, they've got deep pockets. The organization that proposed those countermeasures has collected nearly $80 million from tech and business leaders since January. Journal Enterprise reporter Laura Nelson is based in Los Angeles and joins me now. Laura, the organization, which is called Building a Better California, describes itself as a nonpartisan organization working to tackle long-term issues. How is it pushing back against the proposed wealth tax?

Laura Nelson (3:57)

That's right. So they have proposed three ballot measures of their own, each of which would take aim at a certain portion of the billionaire tax proposal. One of them would require more auditing of special tax programs in the state and would also set up a possible collision course with the billionaire tax over how some types of tax revenue can be spent. Another would bar retroactive taxes and new taxes on personal property and then there's a third that would bar new taxes from bypassing rules that California has about how tax revenue needs to be spent for schools. So all three of these, none of them would directly negate the entire billionaire tax, but they would kick out legs from under the stool, if that makes sense.