Meta seeks immunity from child-harm lawsuits in safety bill

Meta Platforms has lobbied the U.S. Congress for legal immunity from child-harm claims tied to social media products such as Instagram, as it faces thousands of lawsuits from young users and their families. The proposed legislative language, reviewed by Reuters, aims to make online companies immune from suit or liability under state law for claims relating to children's online safety. This lobbying effort is part of negotiations surrounding the Kids Online Safety Act (KOSA), currently under consideration in the U.S. Senate, which represents the most significant attempt to regulate online platforms in the U.S. since the 1990s.

If adopted, the provision could undermine thousands of lawsuits against Meta and other online platforms. Meta and Alphabet Inc.'s Google's YouTube face a combined $6 million in damages after they lost the first case at trial early this year. Meta has proposed the immunity language in exchange for dropping its opposition to KOSA, a bill sponsored by U.S. Senators Marsha Blackburn and Richard Blumenthal. The Mark Zuckerberg-led company previously helped defeat KOSA two years ago by raising concerns about freedom of speech.

The legislation mandates that technology firms establish online safety measures for children, such as restricting harmful design features and allowing users to opt out of algorithmic content suggestions. Under KOSA, companies would be required to exercise care in deploying specific features including infinite scrolling, activity notifications, and appearance-altering photo filters. The bill also includes provisions that override state AI laws and require age verification for app store platforms, thereby shifting some responsibility for child safety away from social media companies.

Meta has historically argued that app stores should be responsible for verifying user ages, a stance supported by the App Store Accountability Act. However, Alphabet Inc.'s Google and Apple Inc. have expressed privacy concerns regarding the age-verification mandate. While legislators have given no indication of adopting the immunity language, the resurgence of KOSA and the App Store Accountability Act in the Senate comes after the White House pushed to supersede state AI laws. Sen. Richard Blumenthal expressed skepticism about potential changes to the bill, stating that the legislation may be "significantly weakened."

Global Regulatory Landscape

The decision by Meta aligns with a broader international push to regulate online safety for minors. The United Kingdom proposed restrictions on social media access for users under 16. The proposed ban targets platforms including Snap Inc.'s Snapchat, TikTok, Alphabet's YouTube, Meta Platforms' Instagram and Facebook, and X. Canada has also introduced new legislation to protect children online by limiting social media access for users under 16 and increasing accountability for technology companies.

Scrutiny Over Safety Practices

Meta has faced constant scrutiny regarding its safety practices for children and teenagers. In February, the company disclosed that it halted the launch of a chatbot product after internal testing revealed high failure rates in blocking harmful content involving minors. Court testimony in a lawsuit brought by New Mexico's attorney general cited red-teaming results indicating the AI frequently failed to prevent child exploitation, crime-related, hate, and self-harm content. Meta disputed these allegations, asserting that the product was never launched specifically because the testing uncovered these concerns.

Meta Platforms has outperformed the market over the past 10 years by 3.89% on an annualized basis, producing an average annual return of 17.48%. Currently, Meta Platforms has a market capitalization of $1.45 trillion.

Investment Growth Analysis

If an investor had bought $100 of META stock 10 years ago, it would be worth $498.85 today based on a price of $570.59 for META at the time of writing.