Social Media’s New Legal Overhang

It was a brutal day on Wall Street—particularly for shares of Meta Platforms, Reddit and Snap. While the Nasdaq dropped 2.4%, shares of the social media firms plunged between 8% and 10% as the implications of Wednesday’s verdict in the social media addiction lawsuit sank in. That verdict, which found Meta and Google’s YouTube liable for negligence, didn’t concern either Snap or Reddit, mind you. Snap had settled before the trial and Reddit was never involved. 

But investors seem to be more worried about what the legal precedent means for small internet firms. “This is a hugely consequential decision, not just for these two companies involved, but for social media more generally,” said Jennifer Huddleston, senior fellow in tech policy at the Cato Institute, on The Information’s TITV.