California bill aims to protect children from addictive social media

Yahoo Finance tech editor Dan Howley reports on how a proposed piece of legislation from California would allow governmental attorneys to sue social media companies for "unfair business practices" in creating environments that get children addicted to their platforms.

Video transcript

DAVE BRIGGS: Suing for social media addiction. That could soon be a reality in the state of California. A bill actually before the Senate today. Dan Howley here with how the Social Media Platform Duty to Children Act would work. Dan, so you could actually sue a social media company, but you'd have to prove your child is addicted?

DAN HOWLEY: Well, you wouldn't be able to sue yourself as an individual. That was part of an earlier bill, but the Senate Bill would require or allow governmental attorneys, so think district attorneys, things along those lines, state attorney general, to go ahead and sue these kinds of companies for unfair business practices, essentially, in creating means to addict children or get children addicted to their apps.

Now, it doesn't name specific apps. Obviously, that just can't do that. But the main social media apps out there are things like Snap, TikTok, Instagram. Facebook losing kind of the edge with teens and younger users. But certainly, the first three are very popular. And so this would allow those attorneys to then go forward and sue those companies if they were found to be using practices that ensure that kids stay online and addicted to those apps.

And this isn't occurring in a vacuum, by the way. This comes to light as a result of prior stories and the whistleblower, Frances Haugen, who had said that Facebook, now Meta, was aware that its products were addictive to younger users via an internal study. So the study not a massive external study by any means. It was an internal study, but it's been used as kind of this hallmark as saying, look, this company knows that its product is addicted to teens-- or addictive to teens. And it's not doing anything about it. And that's, in effect, its goal.

Obviously, Facebook-- Meta, excuse me-- was also preparing to roll out a version of Instagram for children younger than 13. You have to be 13 to get on those social media apps to begin with. But this is still very much in its early stages, or in its earlier stages. It would still have to go into the Appropriations Committee and then the full Senate and then eventually, if it passes any of that, would be signed into law, if possible, by Governor Gavin Newsom. So it's still not exactly there.

Obviously, you can expect heavy lobbying to continue from tech companies, as well as some of the groups that support them. But still, very interesting take here from California. And we do continue to see at least some movement as far as user privacy in general from the larger federal level as well.

SEANA SMITH: Dan, have we heard directly from Facebook, Instagram, or TikTok about this? And have we seen anything-- this is being introduced in California. Have we seen any similar measures in any of the other 49 states?

DAN HOWLEY: Yeah, there have been measures that have come forward or have been proposed. But this seems to be the most jarring, considering that it's already gone through the state assembly. So it really is kind of the larger boogeyman out there. Plus, when you look at the size of California, the user size, you can't really go ahead and just block all California users for something like this. People can come and go from California.

Obviously, it just wouldn't make sense to have companies run a version of an app for California residents, and then a separate version of the app for people outside of California. It's just an untenable situation. So they would likely have to ensure that they meet the same standards across all of their-- every user throughout the US, at least. And so that's really, I think, where the main issue comes. But obviously, these companies don't want to have to go through any of this.

They are going to try to fight it. They have said that they're working with lawmakers as far as privacy goes. And they do have thoughts, according to them, as far as keeping kids from overusing apps. There's different things that they've introduced, whether that's timers, you know, how long you can use an app, parental kind of restrictions that have been introduced to things like Instagram.

So they're saying that they're working on it. But at the same time, you have that internal Facebook study that had come forward through Frances Haugen. It kind of feels like talking out of both sides of their mouth. And they'll have to see what the Senate here in California-- well, there in California-- ends up voting on.

SEANA SMITH: Hey, Dan, real quick, before we let you go, this Twitter saga, Twitter, Elon Musk, a group of Twitter users are now looking to block the sale here, block the deal of Elon Musk buying Twitter. This is Twitter shareholders, excuse me. What can you tell us about this?

DAN HOWLEY: Yeah, this is still very much kind of breaking in early in discussions. But obviously, we've seen some of the rancor from some Twitter shareholders against Elon Musk. There's also the upcoming shareholder vote that will take place to determine whether or not Elon Musk can actually go forward with the purchase if they vote to affirm that. We've seen the leadership at Twitter say that they want to do that. And so now it's a matter of time when that vote comes, if Elon Musk does become the owner of Twitter.