Ohio sues Meta alleging Facebook parent misled public about its products’ effect on children
Facebook and its executives allegedly violated federal securities law
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Ohio’s attorney general is suing Meta Platforms Inc., formerly known as Facebook Inc., alleging the company misled the public about how it controlled its algorithm and the effects its products have on children.
The lawsuit, filed on behalf of Meta investors and the Ohio Public Employees Retirement System, seeks more than $100 billion in damages and demands that Meta make significant changes so as to not mislead investors again, Ohio Attorney General Dave Yost said in a statement.
"This suit is without merit and we will defend ourselves vigorously," Joe Osborne, a Meta spokesperson, said.
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WASHINGTON, DC - OCTOBER 23: With an image of himself on a screen in the background, Facebook co-founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill October 23, (Photo by Chip Somodevilla/Getty Images / Getty Images)
The lawsuit alleges that between April 29 and Oct. 21, 2021, Facebook and its executives violated federal securities law by intentionally misleading the public about the negative impact of its products on minors in an effort to boost its stock and deceive shareholders.
"Facebook said it was looking out for our children and weeding out online trolls, but in reality was creating misery and divisiveness for profit," Mr. Yost, a Republican, said.
"The truth began to emerge on September 13, 2021, when The Wall Street Journal published the first of a series of articles, referred to as ‘The Facebook Files,’" the lawsuit states, in reference to reporting by the Journal that showed the company knows that its platforms are riddled with flaws that cause harm.
The Facebook Files series revealed that the company knew its photo-sharing app Instagram was harmful to some teenage girls among other things.
A man is silhouetted against a video screen with an Facebook logo as he poses with an Samsung S4 smartphone in this photo illustration taken in the central Bosnian town of Zenica, August 14, 2013. REUTERS/Dado Ruvic/File Photo
Those revelations led Facebook stock to fall by $54.08 a share and caused the Ohio Public Employees Retirement System and other Facebook investors to lose more than $100 billion, Mr. Yost said.
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In May, Mr. Yost and attorneys general from 43 other states and territories urged then-Facebook to abandon its plan to build an Instagram app for kids under age 13, citing behavioral and privacy concerns.
In September, amid growing bipartisan political pressure, the company said it was suspending the project. The move came a little less than two weeks after the publication of the Journal story about how Instagram harms some teenage girls.
Facebook CEO Mark Zuckerberg speaks during a live-streamed virtual and augmented reality conference to announce the rebrand of Facebook as Meta, in this screen grab taken from a video released October 28, 2021. Facebook/Handout via REUTERS ATTENTION (Reuters)
Revelations by Facebook whistleblower Frances Haugen also are accelerating efforts in the Europe Union to impose sweeping new restrictions on big technology companies.