Meta Faces Thousands of Social Media Addiction Lawsuits

This article first appeared on GuruFocus.

Meta Platforms Inc. (META, Financials), the parent of Facebook and Instagram, suffered another legal setback after a U.S. appeals court allowed thousands of lawsuits over alleged social media addiction to move forward.

The 9th U.S. Circuit Court of Appeals rejected an early appeal from Meta and TikTok challenging a lower court ruling that required them to face more than 3,000 federal lawsuits.

The court also denied Meta’s attempt to delay a separate trial brought by 29 state attorneys general. That case accuses the company of collecting children’s data, designing features that keep younger users engaged and misleading consumers about safety.

The timing is difficult for Meta. A New Mexico judge recently ordered the company to pay $567 million into a youth mental health fund, on top of $375 million in earlier penalties.

For investors, the bigger issue is not any single award. It is the growing risk that repeated cases lead to broader changes in how Meta designs and monetizes its platforms. That could eventually affect engagement, advertising and compliance costs.