Why Instagram, Facebook and YouTube got sued

In today’s episode on 31st March 2026, we explain why Meta and YouTube were brought to court over their platforms. Sign up for FREE insurance masterclass by Ditto https://ditto.sh/2cgegs

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  Hello folks, you're tuned in different shots daily. In today's episode, we explain why Meta and YouTube were brought to court over their platforms.

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  But, here's a quick side note before we begin. This weekend, we're hosting a free two-day insurance masterclass that helps you build real financial security by understanding health and life insurance the right way. If you'd like to register while the seats last, you can do so by heading to the link in the description. Alright, let's get on to today's story. More often than not, most of us find ourselves in a situation like this. You open Instagram just for a few minutes. One reel turns into five, five turn into twenty, and before you realise it, half an hour has gone by. Nothing forced you to stay, you could have left at any time. At least, that's how it feels. For years, social media platforms like Instagram and YouTube were seen as a neutral space. It's where everybody could join, interact and share their pictures and videos from their life,

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  and at the same time, find out the happenings of the world and their closest friends. And the best part is that it's completely free of cost. No subscriptions and no upfront cost. All you needed was an internet connection and a device. But of course, nothing is truly free. Because while users like you and me weren't paying with money, we were paying with something else. Our time, our attention and eventually, our behaviour around the platforms themselves. You would assume that since these platforms do not create most of the content themselves, they are neutral by design. That whatever impact they have depends entirely on what people choose to watch. But that assumption misses something important. Behind the scenes, these platforms were doing more than just hosting content. They were learning about us. Every scroll, pause and like became a signal.

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  Over time, those signals began shaping what users saw next, how long they stayed and how often they came back. Which raises a more uncomfortable question. If platforms are not just showing content but actively shaping behaviour, can they still be considered passive? Now that question was at the centre of a Los Angeles courtroom battle very recently. Last week, both Meta, who owns Instagram and Facebook, and Google, who owns YouTube, were sued by a young woman who argued that these platforms were not just engaging but deliberately addicting. She claimed that using them from a very young age led to usage patterns that in turn led to serious mental health issues. The companies pushed back and argued that there is no such thing as an addictive platform. After all, there are billions of users who use their products on a daily basis and there's

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  the matter of choice. However long a user decides to stay is their personal choice and responsibility, not product design itself. So in many ways, their arguments sounded intuitive. Let's understand this with an example of, let's say, your favorite restaurant. Now, as good as the food is, there is a very low chance you would call it addictive. And even if you kept going back, it would be strange to expect the restaurant to tell you to stop. But the court did not see social media the same way. A restaurant serves you when you walk in, it does not adapt in real time or place another dish on your table the moment you finish one. Social media platforms do so. So, why do we continue to scroll? Because the platforms are doing more than just showing content. They're actively guiding what you see and how long you stay.

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  The features like infinite scroll, autoplay, and of course, algorithmic recommendations weren't seen as neutral tools. Rather, it was seen as a system that removed the natural stopping points. That means there's no clear place to pause and definitely no end to reach. Each swipe does not just show the next post or video, it offers a possibility. Maybe the next one is funnier. Maybe the next one is more interesting. Hey, maybe the next one's more relevant to me. Most of the time, it is not, but every once in a while it is, and that unpredictability is what keeps the loop going. In court, experts described this as a system built on variable rewards, as unpredictable mix of content that keeps users chasing the next hit. This kind of behavior is not new. Casinos are designed to keep people playing.

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  Shopping malls are designed to keep people browsing. Both use subtle cues to extend how long you stay, often without you noticing it. But this case went beyond how these systems work. Multiple studies in the past have proved it as much. It was about the choices the companies made despite what they knew. Years ago, Francis Hogan, a former Facebook employee and a whistleblower, had already suggested that platforms were aware of the trade-offs between engagement and user well-being. What was once an allegation has now been argued as evidence. Which meant the question was no longer just about what these platforms did to users. It was about the decisions they made anyway, and that difference changed everything.

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  If you remember in one of our previous podcasts, we talked about regulating attention and why that was difficult compared to alcohol or tobacco. Because attention is tied to speech and commerce, among other things. For years, platforms like Meta and YouTube had a powerful legal shield protecting them. It is called section two thirty and it was built on a simple idea. Since these platforms don't create the content themselves, they cannot be held responsible for it. It is why Facebook was not liable for hate speech on its platform and why YouTube was not liable for radicalization videos. But this case never challenged the content, it challenged the design. And section two thirty was simply not built to answer for that. It protects platforms for what flows through them. It has no answer for how the pipe itself was built.

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  So the jury did something that reframed the entire debate. Instead of treating Instagram and YouTube as neutral spaces, they treated them as products. And that changes the standard entirely. A product does not have to guarantee harm to be held accountable. It only needs to make harm reasonably foreseeable and still continue without adequate safeguards. The jury found that threshold had been crossed. The verdict came with six million dollars in damages. But for companies the size of Meta and YouTube, that is a rounding error. So it raises the question, why fight it at all? After all, platforms like TikTok and Snapchat had quietly settled similar cases before they even reached a verdict. The answer is that this was never about the six million dollars. It was about what a loss would mean.

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  To understand that, think about a factory that dumps waste into a river. The factory profits while the town downstream pays for the cleanup. The damage is real, but it never shows up on the factory's balance sheet. Social media platforms operate in a similar way. The ad revenue, the engagement, the targeting, that stays with the platform. But the anxiety, the depression, the healthcare bills, the lost productivity, now those get quietly absorbed by families, schools, hospitals and governments. The platform books the profit, society pays. Economists call this a negative externality and for a long time, social media companies did not have to account for it. The tobacco industry once had a similar arrangement. Cigarette companies sold a product they knew was addictive while governments around

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  the world picked up the healthcare tab. It took decades and a specific legal shift before these companies were made to answer for the costs that they had long offloaded on to others. The turning point was not the cigarettes. It was proving in the court that the companies already knew what their product was doing. This verdict follows the same logic. The internal documents show that the companies knew their design was habit forming and yet they continued to optimize for it. When the jury chose to treat the platform as a product rather than a passive platform, those hidden costs finally had someone to send a bill to. Because a deeper problem for these companies is that here, the design itself becomes a product. The algorithm is the revenue engine.

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  If the design becomes legally liable, the very thing that makes them money becomes a source of their legal risk. Every lawsuit that follows this verdict will use the same argument. And there is no section 230 defense waiting at the end of it. Which brings us back to where we started. Remember that half hour you lost on Instagram without quite knowing how? Well, it turns out someone designed it that exact way. Someone optimized it, tested it, and shipped it, knowing what it could do. And for a long time, the cost of that decision was invisible and spread quietly across living rooms, classrooms, and hospital waiting rooms. Alright folks, I'll see you in the next one. Thank you for listening to today's episode.

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  And if you want to share your feedback or suggestions, do drop us an email to [email protected]. Until next time.