Based on findings from whistleblower Frances Haugen and the volume of internal business records she exposed, Ohio Attorney General Dave Yost stated on Monday that he is suing Meta, the social media juggernaut formerly known as Facebook.
The Ohio Public Employees Retirement System and other investors have filed a securities complaint alleging that the firm misled the public about its algorithm and the problems its apps can cause users, according to the company’s own research.
It says that Facebook-turned-Meta executives broke the law by making misleading assertions regarding the “safety, security, and privacy of its platforms” in order to enhance the company’s stock price.
According to the lawsuit, Meta shares have dropped roughly 7% since news of Haugen’s assertions and internal papers broke two months ago, causing more than $100 billion in losses to investors.
“[Meta] repeatedly misrepresented to investors and the public that use of Facebook’s products does not harm children, that the Company takes aggressive and effective measures to stop the spread of harmful content, and that Facebook applies its standards of behavior equally to all users,” the lawsuit alleges.
“Facebook investors recently learned the truth when former Facebook employee turned whistleblower, Frances Haugen, came forward with internal documents showing that Defendants were aware that Facebook’s platforms facilitate dissention, illegal activity, and violent extremism, and cause significant harm to users,” the complaint states.
The firm is named as a defendant, along with CEO Mark Zuckerberg, CFO David Wehner, and Vice President of Global Affairs Nick Clegg.
“This suit is without merit, and we will vigorously defend ourselves,” Meta spokesperson Andy Stone told CNN Business Monday.
The Wall Street Journal began publishing the “Facebook Files” series in September, based on internal documents, which expressed worries about Instagram’s effects on underage girls, among other issues. The news sparked a Senate subcommittee meeting with Antigone Davis, Facebook’s global safety chief.
After that, Haugen appeared before a Senate subcommittee, saying that “Facebook’s products harm children, stoke division, and weaken our democracy.”
Haugen presented the Securities and Exchange Commission and politicians with internal documents that have become known as the “Facebook Papers.” The redacted copies acquired by Congress were reviewed by a group of news organizations, including CNN.
The docs provide the most in-depth look yet at many of Meta’s most pressing issues, including its approach to combatting hate speech and misinformation, managing foreign expansion, and safeguarding the platform’s younger users.
Another former Facebook employee anonymously filed a complaint with the Securities and Exchange Commission last month, alleging charges identical to Haugen’s.
“These disclosures erased more than $100 billion in shareholder value and subjected Facebook to immense reputational harm,” according to the Ohio complaint, which was filed on Friday.
Haugen’s assertions have been consistently rejected by Meta, who maintains that the documents distort the company’s research and actions.
“At the heart of these stories is a premise which is false,” a Facebook spokesperson said in a statement to CNN about the Facebook Papers last month. “Yes, we’re a business and we make profit, but the idea that we do so at the expense of people’s safety or wellbeing misunderstands where our own commercial interests lie.”
Following the publication of the Facebook Papers, the firm stated that it would change its name to Meta, a reference to its ambitious intentions to create an immersive internet platform known as the metaverse. It also tweaked its ad-targeting methods and how it used facial-recognition technologies.
Nonetheless, members of Congress have demanded that Zuckerberg speak on the findings of the documents.
In a statement released Monday, Yost’s office said the lawsuit “not only seeks to recover that lost value but also demands that Facebook make significant adjustments to ensure it does not mislead the public about its internal practices.”