- Ohio's Attorney General is suing Meta, alleging it misled the public and cost investors billions.
- The suit says the company violated federal securities laws by failing to disclose its harm to young users.
- Lawsuits like this remain a bigger risk for Meta than potential regulation from Congress.
Ohio's Attorney General filed a lawsuit against Meta, formerly known as Facebook, on Monday, accusing the company of violating federal securities law by failing to disclose internal research about its platforms' harmful effects on children to investors.
The case was filed on behalf of the Ohio Public Employees Retirement System and Facebook investors, who collectively lost more than $100 billion in market share since employee-turned whistleblower Frances Haugen first leaked internal documents to the Wall Street Journal, AG David Yost said.
"Facebook said it was looking out for our children and weeding out online trolls, but in reality was creating misery and divisiveness for profit," Yost said in a press release. "We are not people to Mark Zuckerberg, we are the product and we are being used against each other out of greed."
Yost said in the press release that he hopes to recover the pension fund's losses with the lawsuit as well as ensure that the company "makes significant reforms" to avoid misleading the public again.
A Facebook representative said: "This suit is without merit and we will defend ourselves vigorously."
Monday's filing is likely the first major lawsuit against the company since Haugen first leaked thousands of internal discussions, memos, and research to federal regulators and the media. Among the trove of materials are instances when Facebook knew its products were unhealthy and potentially dangerous for teen users but undermined efforts to counteract that harm.
Haugen testified before Congress that the company chooses " profits over safety."
The company has maintained that the documents do not paint a complete picture of Meta and its safety efforts. Its share price has fallen roughly 9% since the first "Facebook Papers" reports began to publish in September.
Monday's lawsuit is also among the first in what experts say is likely to be a flurry of legal action against Meta. Analyst Blair Levin told Insider in October that class action lawsuits — like the handful that have already been filed — and investigations led by state attorneys general like Yost could be more dire threats than any new federal regulation from Congress.
That's because the court could force Meta to make more internal documents public, which could "yield even more problematic evidence for Facebook," Levin said.
Yost was previously one of 40 state attorneys general who in May wrote a letter to CEO Mark Zuckerberg pleading for the company to ax plans to roll out an Instagram version for kids.
Instagram contended that the kids-centric app would allow parents to better supervise and control their children's experiences. But, citing the backlash, Instagram said in September that it was halting plans for it.