Meta Platforms Secures Legal Victory in Child Safety Lawsuit
Meta Platforms (META) and CEO Mark Zuckerberg scored a significant win against a class action lawsuit concerning disclosures about child safety on Facebook and Instagram. The lawsuit, filed by lead plaintiff Matt Eisner, was entirely dismissed by US District Judge Charles Breyer in San Francisco. The judge concluded that Eisner did not demonstrate any economic losses resulting from Meta’s alleged failure to properly disclose child safety issues.
Furthermore, Judge Breyer ruled that Meta did not violate any federal securities laws and was not obligated to share specific details about the risks of sexually explicit content or child exploitation on its platforms. He also noted that the company is not required to announce all child protection methods it opts not to utilize. Since the dismissal was ruled with prejudice, Eisner is barred from re-filing the lawsuit against Meta and Zuckerberg.
Consequences of the Court’s Decision
If the plaintiff had prevailed, the lawsuit could have delayed Meta’s 2024 annual meeting until the proxy statement on child safety was revised, impacting the election results. Additionally, Meta would have been responsible for covering Eisner’s legal fees and costs.
Even though this case has concluded, Meta faces several ongoing lawsuits alleging that its apps contribute to childhood addiction. Various lawsuits by children, parents, and school districts claim that Meta, along with other platforms like TikTok and Snapchat (SNAP), promotes social media addiction.
Should You Invest in META Stock?
Analysts maintain a positive outlook for Meta Platforms stock due to its strong business model. TipRanks reports a Strong Buy consensus rating for META stock, which includes 42 Buys, four Holds, and one Sell rating. The average price target of $627.02 suggests a potential upside of 7.7% from current levels. So far this year, META shares have increased by 64.9%.
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