2023-10-24 12:15:01 ET
Meta Platforms Inc (NASDAQ: META) is paring back gains at writing after a group of 33 attorney generals filed a complaint against it in a federal court.
Here’s why state AGs sued Meta today
The lawsuit alleges that Meta Platforms knowingly designed its social networks to be addictive for the young users. Social comparison on Facebook and Instagram also negatively affects their mental health, as per the AGs.
Support from such a huge, and more importantly, bipartisan group of attorney generals could mean a serious legal challenge for the tech behemoth.
The complaint arrives only a day before Meta Platforms is scheduled to report its quarterly financial results. Consensus is for it to earn $3.57 a share – more than double the figure it reported last year.
The tech stock is currently up more than 150% year-to-date.
Watch here: https://www.youtube.com/embed/q_b-h9iRW4o?feature=oembedWhat else do they say Meta Platforms does wrong?
On Tuesday, the attorney generals also alleged that Meta Platforms violates COPPA – the Children’s Online Privacy Protection Act as it gathers personal data of the users aged 13 and less without proper consent from their parents.
The lawsuit demands an end to harmful practices of the Nasdaq-listed firm on top of penalties as well as restitution.
Note that it’s not the first time that such a big group of state AGs have come together to go after Meta Platforms. 48 states and territories in 2020 also sued the California-based company for antitrust reasons.
Last week, Evercore ISI senior analyst Mark Mahaney dubbed Meta Platforms the cheapest high-quality tech stock ( find out more ).
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