How the landmark verdict against Meta and YouTube could hit their businesses
A Los Angeles jury this week dealt a blow to social media giants Meta and YouTube, finding that the platforms were negligent in designing addictive features that harmed a California woman’s mental health.
Both companies plan to appeal, but the decision has sparked uncertainty about the future of tech companies and raised questions about possible consequences.
The seven-week trial began in February, featuring statements from Meta and YouTube executives.
Kaley GM, a 20-year-old Chico, California woman, sued the platforms in 2023, claiming that her use of social media at a young age led to mental health issues such as body dysmorphia and depression. He also sued TikTok and Santa Monica-based Snap, and those companies reached a settlement before the hearing.
Lawyers representing the women argued that the platforms attract young users with features such as endless scrolling, auto-playing videos and beauty filters.
People use social media to communicate with friends and family, but young people can feel inadequate, sad or anxious when they compare themselves to a curated version of other people’s online lives. They also spend a lot of time watching endless short videos.
The jury determined that 70 percent of the damage Kaley suffered belonged to Meta and 30 percent to YouTube. They awarded him a total of $6 million. The verdict came shortly after a New Mexico jury found Meta liable for $375 million in damages, following the State’s Attorney’s Office. General Raúl Torrez claimed that the platform’s features enable predators and pedophiles to exploit children.
“These decisions mark an unsurprising tipping point. Negative sentiment towards social media has been building for years and has now finally spilled over,” said Mike Proulx, director of Forrester, a market research firm.
How did companies react to the decision?
Meta and YouTube owner Google said they disagreed with the decision and planned to appeal.
“This lawsuit misunderstands YouTube, which is a responsibly created streaming platform, not a social media site,” Google spokesman Jose Castañeda said in a statement.
Meta spokesman Andy Stone published the company’s statement on social media site X.
“Young people’s mental health is extremely complex and cannot be pinned down to a single app. As every case is different, we will continue to defend ourselves vigorously and remain confident in our record of protecting young people online,” the statement said.
Tech companies are responding to mental health issues, introducing new parental controls so parents can monitor their children’s screen time and manage harmful content. Instagram and YouTube have applications for young people.
But some child rights groups and lawmakers say these changes are not enough.
The decision could affect the money YouTube parent Alphabet and Meta make as they spend more on legal battles. While it makes billions of dollars from advertising, investors are wary of higher expenses. Companies are already spending billions of dollars on artificial intelligence and developing new hardware such as smart glasses.
Meta’s shares fell more than 7% to $549 per share on Thursday. Alphabet saw its share price fall more than 2% to around $280.
In 2025, Meta’s annual revenue increased by 22% compared to the previous year, reaching $200.97 billion.
Last year, YouTube’s annual revenue exceeded $60 billion. Both Google and Meta are laying off workers as they spend more on AI.
The ongoing backlash hasn’t stopped tech companies from increasing the number of users.
The majority of US teens use YouTube, TikTok, Instagram and Snapchat, according to 2025 Pew Research Center questionnaire. More than 3.5 billion people use one of Meta’s products, including Instagram and Facebook.
Social media has continued to change over the years as companies turn to short videos and artificial intelligence chatbots.
As artificial intelligence chatbots that answer questions and generate content become popular, mental health concerns have also increased. Families filed a lawsuit OpenAICharacter.AI and Google after loved ones who used chatbots killed themselves.
Some analysts are skeptical that Meta and YouTube will make radical changes to their products, as they have weathered crises before.
“Neither Meta nor YouTube will do anything different until the court orders or there is a significant decline in user or advertiser usage,” said eMarketer Principal Analyst Max Willens.
Legal risks could also affect how tech companies develop new AI-powered products and features, other analysts said.
“Tech firms will now face greater scrutiny over the design of their platforms, leading to more thoughtful inclusion of features that encourage healthier interactions and protect mental health,” said Gartner Marketing Leaders analyst Andrew Frank.
Proulx said the decisions at least serve as “a dire warning about how we will handle the next wave of technology.”
“If nearly two decades later we are still struggling to put effective guardrails around social media, we are far from being prepared for the increasing harms of AI that moves faster, scales more broadly, and becomes ever more deeply embedded in people’s lives,” he said.
Times writer Sonja Sharp contributed to this report.
