News & Insights

Digital Dive: Meta’s Latest Legal Challenge, X’s Subscription Plans, GA4 Updates, and More

By Alyssa Carino

The Digital Dive - Digital Intelligence Newsletter.

The Big Story

Meta Faces Massive Lawsuit Over Targeting Children

In the latest string of legal actions aimed at protecting children online, Meta found itself at the center of a sweeping legal challenge. Over three dozen U.S. states joined forces, accusing the social giant of using manipulative features on its platforms, Instagram and Facebook, to draw kids into extended use, all the while advertising its site as safe for young users.

Colorado and Tennessee took the lead in this monumental lawsuit, which was filed in the U.S. District Court for the Northern District of California and alleges that Meta has gone against consumer protection laws. The main contention is that the company has not only captured the attention of children but also misled its vast user base about the safety of its platforms. Following in their footsteps, the District of Columbia along with eight other states lodged separate but strikingly similar lawsuits against Meta. The show out from these states underlines the prioritization of children’s online safety. This collaborative legal approach mirrors past efforts where states teamed up against major industries like Big Tobacco and Big Pharma.

The states accuse Meta of employing psychologically addictive features to induce a near-obsessive usage among young audiences on platforms, especially Instagram. State officials pointed to certain algorithm-driven features like the “infinite scroll” and incessant notifications as tools purposefully used to captivate young minds. Furthermore, they claim that Meta is in breach of a Federal Children’s Online Privacy Act, claiming the company collected data from its youngest users without gaining parental consent.

Drawing attention to the magnitude of Meta’s influence, the 233-page lawsuit reads: “Meta has harnessed powerful and unprecedented technologies to entice, engage, and ultimately ensnare youth and teens.” The states did not mince words when pointing out the motive behind such actions, stating it was purely for profit.

Meta, on its part, defended its commitment to creating a safer environment for teens on its apps, highlighting its introduction of over 30 tools aimed at supporting both teenagers and their families. The company expressed its disappointment with the legal route chosen by the attorneys general, stressing that industry-wide collaboration would be a more constructive approach.

International regulators have been striving to keep platforms, such as Instagram and TikTok, in check to ensure child safety. Countries like the UK and US, among others, have passed laws demanding enhanced online privacy and safety measures for minors. Last year, a UK coroner ruled that Instagram had played a role in the tragic death of a teenager exposed to vast amounts of self-harm content.

Despite these global actions, in the U.S., legislative efforts to enhance children’s online safety seem to be halted by extensive lobbying from tech giants. The states are now pushing for financial penalties against Meta and are seeking injunctive relief to halt the use of specific tech features they deem harmful to children. As the lawsuit proceeds, Meta is likely to fiercely counter these allegations.

Social Updates

“Not a Bot” Subscription Plan

In the latest Elon Musk and X news, the platform has started to test its new “Not A Bot” subscription plan for users in the Philippines and New Zealand. With this subscription plan, users will have to pay $1 annually (prices vary by country and currency) to be active and post on the platform. Users that do not pay the $1 annual fee will only be allowed to read posts, watch videos and follow accounts. According to Musk, this is the “only way to fight bots without blocking real users. This won’t stop bots completely, but it will be 1000x harder to manipulate the platform.” The roll out of this new subscription plan globally could turn even more users away from the platform, which has been steadily losing daily active users since Musk’s purchase last October.

EU Officials Crack Down on Disinformation Efforts

Amidst the Israel-Palestine conflict, EU officials are enforcing social media platforms, like Meta and TikTok, to provide transparency around how they are handling the influx of mis-and disinformation. As social media usage continues to grow worldwide, so do the threats of those weaponizing the platforms. There have already been various reports of social media platforms being used to share propaganda and disturbing content in an effort to sway opinions. Under the Digital Services Act, which was created to establish a safe and accountable online environment, EU officials have sent official requests over to Meta and TikTok to ideally limit this threat to European social media users. Companies that do not abide by these official EU requests in a timely manner may face fines up to 6% of their total global revenue.

Instagram Tests “Nearby” Feature

Instagram is testing a new “Nearby” feed for Stories to showcase public content from users and businesses close to a user’s location. This feature resembles the local content feed of China’s version of TikTok, Douyin, which emphasizes promoting local businesses and has been a significant engagement driver. TikTok is also dabbling with a similar “Nearby” feed feature. The “Nearby” feature can open avenues for local promotions and advertisements, evidenced by Douyin’s venture into services and food delivery promotions. While in-app shopping is dominant in Douyin, Western TikTok users haven’t been as engaged in in-app purchases. Instagram’s experiment with the “Nearby” feature could be a strategic move against TikTok’s potential plans. However, Instagram may need to remind users to update privacy settings to control content visibility.

Digital Updates

Google Gives Publishers the Choice to Participate in AI Training

As Google continues to hone their AI technology, like Bard, they recently released a new tool giving publishers the choice of participating in these efforts. With Google Extended, publishers are now given the option to opt out of site crawlers scraping their site data for the training of these AI models. Publishers have already expressed concerns about AI models plagiarizing their content without proper attribution. Some marketers, however, fear that opting out of this could ultimately impact their rankings on Google’s search results. Although Google claims that this choice will not affect search rankings, some marketing professionals are already warning about potential future backlash of opting out and being penalized in Google’s search rankings. Publishers, like the New York Times, have taken matters into their own hands by updating their terms of service to forbid the scraping of its content to train AI technology.

Google Analytics 4 Adds New Customizable Features

Since Google Analytics 4 rolled out in July, marketers have been expressing some difficulty with the transition from Universal Analytics. Since the migration, Google has continued to introduce new features to the platform. Most recently, Google has announced three new features aimed at providing consistent reporting in order to give advertisers the power to make data-backed business decisions.

  • Customized reporting: Arriving in the coming weeks, this feature allows users to create custom reporting experiences tailored to the specific needs of their different teams, resulting in faster access to insights.
  • BigQuery reports: Later this year, GA4 plans to roll out a faster and more comprehensive BigQuery daily. With this enhancement, businesses will receive their data consistently each day and advertisers can leverage this first-party data to create tailored predictive lifetime models to suit their business requirements.
  • Links + integrations: Although the exact launch date has not been confirmed, Google plans to give advertisers the capability to link their subproperties and roll-up properties to Display & Video 360, Campaign Manager 360, and Search Ads 360. This enhancement aims to support advertisers in achieving their media buying objectives.

From the Screen to the Streets: Netflix Houses

In the search for new revenue streams, Netflix announced that it is set to open brick and mortar locations in the U.S. by 2025. The coined “Netflix Houses” will provide fans with immersive experiences from their favorite shows and offer merchandise, food, and show-themed activities. This move comes after successful temporary endeavors like “Netflix Bites,” a dining pop-up in L.A., and various other pop-up events in countries such as Japan, where fans could experience show settings from hits like “Stranger Things.” Netflix’s strategy has also expanded to include collaborations with global brands for exclusive merchandise, like Lacoste’s “Stranger Things” line and Athletic Brewing’s beer inspired by “The Witcher.” To monetize fandom further, Netflix organized “The Queen’s Ball: a Bridgerton Experience” with tickets ranging from $45 to $85, capitalizing on the show’s massive popularity. These physical initiatives, combined with Netflix’s online merchandising and new ad-tier subscriptions, showcase the company’s commitment to a long-term strategy of interactive fan engagement and potential new revenue streams.

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