Investors sue Meta, alleging that Facebook exploited users to make a profit
A group of investors filed a class-action complaint against Facebook's parent company, Meta Platforms, on Friday, alleging that the firm failed to disclose a variety of content-related issues with the social media platform.
The litigation, filed on behalf of investors who purchased Facebook stock earlier this year, said that Facebook's moderators violated the public's trust by exploiting its users to earn profits.
The investors are suing for compensation for their equities, claiming that Facebook's deceptive acts led the stock price to be artificially inflated.
"Defendants repeatedly misrepresented to investors and the public that use of Facebook's products does not harm children, that the Company takes aggressive and effective measures to stop the spread of harmful content, and that Facebook applies its standards of behavior to all users," according to the legal filing.
According to the lawsuit, while Facebook advertised all of these assertions as accurate, the business did not take any steps to prevent the spread of disinformation. According to further arguments, Facebook promised investors it had "the most robust set of content policies available," but knew this was incorrect.
This information comes from Facebook whistleblower Frances Haugen's recent congressional testimony, in which she repeatedly described the network as "hazardous." Haugen, a former corporate official, provided internal records demonstrating that the corporation was aware that Facebook was being used to propagate discord and hurt users, but "refused to remedy these flaws."
Instead, the suit claims that Facebook "decided to maximize its revenues at the expense of the safety of its users and the general public, exposing Facebook to substantial reputational, legal, and financial injury."
Facebook also attempted to reach out to "a valuable but untapped audience" of pre-teens, whom the firm allegedly knew were especially exposed to the negative impacts of social media.
Furthermore, according to a Wall Street Journal article that first described the leaked documents, Facebook has purportedly excused millions of "high-profile" users from its code of conduct.
According to reports, Facebook and its co-platform, Instagram, did their own research on the effects of their products on adolescent girls.
According to the findings of this study, Facebook "worsen[s] body image difficulties for one in three young females," and many of these girls "blame Instagram for rises in the rate of anxiety and despair." This is said to have resulted in higher incidences of suicidal ideation and eating disorders among these girls.
The lawsuit also stated that Facebook's reactions to criminal activity on the network were "weak and ineffectual." This includes the use of Facebook by members of drug cartels and human traffickers.
Mark Zuckerberg founded Facebook in 2004, and it has since grown to become the world's largest social networking platform, with an estimated 3.5 billion users across various sites.