Market Analysis

Meta Platforms and its CEO, Mark Zuckerberg, successfully had a lawsuit dismissed that accused them of misleading shareholders in Meta's proxy statement regarding the safety of children using Facebook and Instagram.

On Tuesday, U.S. District Judge Charles Breyer in San Francisco ruled that the plaintiff, Matt Eisner, failed to demonstrate that shareholders experienced economic losses due to Meta's alleged insufficient disclosures. Breyer stated that federal securities laws did not require Meta to disclose the extent of sexually explicit content or child exploitation on its platforms, nor did it need to reveal all the child protection measures it chose not to implement.

Breyer commented, "In essence, Eisner would have had Meta argue against its own recommendations, tout the benefits of tools it ultimately rejected, highlight its own failures, and devalue its own successes. That is not necessary."

Eisner's legal team did not immediately respond to requests for comment, nor did lawyers for Meta and Zuckerberg.

The lawsuit aimed to prevent Meta from holding its 2024 annual meeting until the proxy statement was revised, void any election results if the meeting occurred, and require Meta and Zuckerberg to pay Eisner's legal fees and costs.

In June, Breyer denied a request to halt the meeting, noting that many of Meta's assurances regarding children's safety in the proxy statement were merely "aspirational" and did not warrant a lawsuit.

The dismissal was with prejudice, meaning Eisner cannot file another suit against Meta and Zuckerberg on this matter.

Meta is still facing lawsuits from numerous state attorneys general alleging that the California-based company has contributed to children becoming addicted to its apps while minimizing the associated risks. Additionally, it is dealing with hundreds of lawsuits from children, parents, and school districts concerning social media addiction. Other platforms like TikTok and Snapchat are also facing similar lawsuits.

The case is Eisner v. Meta Platforms Inc (NASDAQ) et al., in the U.S. District Court, Northern District of California, No. 24-02175.

Paraphrasing text from "Reuters" all rights reserved by the original author.