A California jury recently delivered a landmark verdict in K.G.M. v. Meta Platforms, Inc., finding Meta Platforms, Inc. (“Meta”) and Alphabet Inc.’s Google LLC (“Google”) negligent for designing products that harmed a young user’s mental health. (Cecilia Kang, Ryan Mac, & Eli Tan, N.Y. Times). The case is especially significant because it was selected as one of three scheduled bellwether trials, a representative test case used in large-scale litigation to help courts and parties evaluate how juries may respond to the core legal and factual issues that appear across thousands of similar lawsuits. (Bobby Allyn, NPR; Simmons & Fletcher). K.G.M. was chosen from a pool of more than 1,600 plaintiffs, including over 350 families and 250 school districts, all alleging harm from social media platforms. (Quynh Hoang, The Conversation). As a representative case, the verdict may shape settlement strategy, litigation posture, and the trajectory of similar lawsuits nationwide. This post examines the arguments raised at trial that led to the verdict, considers the issues Meta and Google will likely raise on appeal, and explores how the verdict could reshape liability for social media companies going forward.
Read MoreThe U.S. Securities and Exchange Commission (“SEC”) has recently intensified its scrutiny of artificial intelligence (“AI”) fraud by targeting misleading claims about AI in the investment space. (SEC Press Release). This enforcement effort, focused on preventing a deceptive marketing tactic called “AI washing,” aligns with a broader regulatory trend focused on ensuring transparency in AI disclosures. Id. The SEC has pursued enforcement actions against public companies and investment advisers that exaggerate their AI capabilities or falsely claim to integrate AI into decision-making processes. (Kevin Friedmann, et. al., Norton Rose Fulbright). As AI technology becomes more prevalent in financial and corporate sectors, companies must navigate these regulations carefully to maintain compliance and investor confidence. This post examines the SEC’s enforcement actions, anticipates the agency’s future focus, and explores the implications for advisors and businesses that use AI.
Read MoreThe Department of Justice (“DOJ”) recently filed a lawsuit against RealPage Inc. (“RealPage”), a real estate software company, alleging that the company’s algorithmic pricing software violated antitrust laws. (Press Release, U.S. Department of Justice). The DOJ brought the lawsuit under the Sherman Antitrust Act, the “first Federal act that outlawed monopolistic business practices” and prohibited activities restricting competition in the marketplace. (Sherman Antitrust Act, National Archives). Attorney General Merrick Garland stated, “[l[andlords colluding through mathematical algorithms may be new, but it violates the same bedrock principle of a free market fostering competition.” (Jennifer Ludden, NPR). This post explores RealPage’s background, discusses the DOJ’s and RealPage’s arguments for and against the suit, and examines the possible implications for algorithm-driven businesses.
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