Ohio’s attorney general is suing Meta Platforms Inc., FB -0.75% formerly known as Facebook Inc., alleging the company misled the public about how it controlled its algorithm and the effects its products have on children.
The lawsuit, filed on behalf of Meta investors and the Ohio Public Employees Retirement System, seeks more than $100 billion in damages and demands that Meta make significant changes so as to not mislead investors again, Ohio Attorney General Dave Yost said in a statement.
“This suit is without merit and we will defend ourselves vigorously,” Joe Osborne, a Meta spokesperson, said.
The lawsuit alleges that between April 29 and Oct. 21, 2021, Facebook and its executives violated federal securities law by intentionally misleading the public about the negative impact of its products on minors in an effort to boost its stock and deceive shareholders.
“Facebook said it was looking out for our children and weeding out online trolls, but in reality was creating misery and divisiveness for profit,” Mr. Yost, a Republican, said.
“The truth began to emerge on September 13, 2021, when The Wall Street Journal published the first of a series of articles, referred to as ‘The Facebook Files,’” the lawsuit states, in reference to reporting by the Journal that showed the company knows that its platforms are riddled with flaws that cause harm.
The Facebook Files series revealed that the company knew its photo-sharing app Instagram was harmful to some teenage girls among other things.
Those revelations led Facebook stock to fall by $54.08 a share and caused the Ohio Public Employees Retirement System and other Facebook investors to lose more than $100 billion, Mr. Yost said.
In May, Mr. Yost and attorneys general from 43 other states and territories urged then-Facebook to abandon its plan to build an Instagram app for kids under age 13, citing behavioral and privacy concerns.
In September, amid growing bipartisan political pressure, the company said it was suspending the project. The move came a little less than two weeks after the publication of the Journal story about how Instagram harms some teenage girls.
Revelations by Facebook whistleblower Frances Haugen also are accelerating efforts in the Europe Union to impose sweeping new restrictions on big technology companies.