Meta challenges latest legal penalties

Meta is fighting back against legal penalties in an effort to lessen the impact of future liabilities.

 The social media giant challenged Britain’s Office of Communications over the scope of penalties that can be leveled at the company over violations, and has also asked a Los Angeles court to throw out a verdict regarding the company’s liability for causing a woman’s depression.

In the first instance, as reported by Reuters, Meta is challenging the U.K. media regulator Ofcom over the scale of potential penalties.

Under U.K. law, Ofcom is able to impose fines on Meta based on its worldwide revenue, rather than the revenue of an individual site or ​app, and regardless of whether that revenue relates to regulated services, per Reuters. Meta said this is disproportionate and unlawful, and unfairly penalizes the company based on its size and scope.

“We believe fees and ‌penalties ⁠should be based on the services being regulated in the countries they’re being regulated in,” a Meta spokesperson said in a statement to Reuters.

These types of provisos are built into many regulations, including EU DSA regulations, noting that Meta, and other tech platforms, can be fined a percentage of their worldwide revenue. That ramps up the pressure on each company to meet whatever standards and requirements are set, but Meta is now arguing that this is an unfair approach.

This will become a bigger issue as Meta continues to diversify its revenue intake. Meta is now selling artificial intelligence-powered glasses, as well as AI models for commercial use. The company is also looking to expand into humanoid robots in future, shifting the organization’s entire business model.

As such, Meta’s argument is that these corporate ventures should not be considered when levying penalties over, say, Facebook violations.

Meta’s challenge is due to be heard ​in October.

On another front, Reuters also reported that Meta asked a Los Angeles judge to throw out a recent jury verdict that held the company liable for causing a woman’s depression.

In March, a jury found that both Meta and Google’s YouTube can have significant health impacts on users, due to intentionally designed, addictive systems. The jury said both companies ignored risks in order to maximize business opportunities.

The plaintiff argued that these systems prompted clinical depression, and was awarded $3 million in compensatory damages. In addition, the jury awarded an additional $3 million in punitive damages. Meta is scheduled to pay $4.2 million of that amount, with YouTube set to pay $1.8 million.

While the financial penalties are one element, the finding could also prompt others to pursue similar litigation. So unsurprisingly, Meta is now seeking to get the ruling overturned, in order to shield itself from future penalties.  

Meta filed the motion earlier this week, per Reuters, and asked the judge to schedule a new trial.

Google also plans to appeal the jury verdict.

Given potential precedent for future penalties and litigation, it’s not surprising to see Meta challenging both rulings. It will be interesting to see whether the company can present a strong enough case to overturn these rulings.