Class Action Says Meta Hid from Shareholders Alleged Mental Health Damage to Teen Instagram Users

New to ClassAction.org? Read our Newswire Disclaimer

Meta Platforms—formerly Facebook—faces a proposed class action over its alleged failure to disclose, and subsequent decision to downplay, to investors the results of internal studies that indicated Instagram use was harmful to the mental health of teenagers. 

Front and center in the 51-page lawsuit are myriad revelations brought to light by whistleblower Frances Haugen and reported on by the Wall Street Journal in a series called “The Facebook Files.” The case is among the latest that alleges the reports caused Facebook share prices to drop in September and October 2021, financially injuring investors who claim the company now known as Meta Platforms materially misrepresented and/or omitted certain information that may have influenced their stock buying/selling decisions. 

Facebook, through in-house research, learned as early as 2019 that its products exacerbated negative body image issues for one in three teenage girl Instagram users, the suit says. Moreover, Facebook also knew since then that teens blamed Instagram for increased rates of anxiety and depression, the case relays. 

According to the complaint, Facebook, rather than implement meaningful changes to safeguard the health and safety of vulnerable teenage girl users, and without any disclosure to shareholders in 2019 or 2020, continued to rely on techniques meant to increase the frequency and engagement of young Instagram users “and the resulting harms caused by such extended engagement.” 

The lawsuit contends that Facebook’s failure to include any information on its internal studies indicating Instagram usage was harmful to teenage girls in its annual reports for 2019 and 2020 amounts to a material omission of information significant to investors’ decisions to buy or sell company stock. The filing moreover states that Facebook’s failure to act on this information, as well as its downplay of the information after it was disclosed publicly by Haugen, has sparked numerous state attorneys general, including those from California, New Jersey and Florida, to investigate the social media platform over potential violations of consumer protection laws. 

Noted in the complaint is a website Facebook founder Mark Zuckerberg created as a college undergrad called FaceMash, which allowed students to vote on the attractiveness of female classmates. The lawsuit charges that the “sophomorically conceived” FaceMash was a “foreshadowing of the current endemic ills plaguing Facebook.” 

“Thus, even prior to the founding of Facebook, Zuckerberg was reveling in the objectification of women through the unauthorized public dissemination of superficial physical characteristics presented in two-dimensional photographs,” the lawsuit scathes. 

According to the suit, Facebook has subsequently made “misleading” statements that indicated communities on its platforms have grown organically when, in truth, the company has employed on Instagram allegedly harmful techniques that “drove, rather than supported, the frequency and duration of teenage girl engagement.” 

“This is the antithesis of ‘organic’ growth,” the suit says. 

Overall, although Facebook was trading at approximately $376 per share in September 2021 prior to the publication of the foregoing, its shares fell to $312 a piece by October 27, representing a drop of at least $64 per share and amounting to hundreds of billions in losses, the complaint says. 

The lawsuit looks to represent all persons or entities who bought publicly traded securities of Meta Platforms, Inc. between April 29 and October 21, 2021. 

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s free weekly newsletter here.