This morning I was watching a BBC News segment on the trial Meta is currently facing, and it stopped me cold. The numbers being discussed aren’t hundreds of millions, or even a few billion — plaintiffs are pursuing damages that could run into the hundreds of billions, potentially over a trillion dollars. Twenty-nine state attorneys general, led by California, Colorado, Kentucky, and New Jersey, are arguing in federal court in Oakland that Meta built Facebook and Instagram to be addictive to kids, knew it, and hid what it knew. The case centers on internal decisions — infinite scroll, notification design, algorithmic feeds tuned for engagement — and on emails going back to at least 2016 that reportedly show the company tracking “teen time spent” as a growth metric. Mark Zuckerberg himself is expected to testify before the trial wraps in about six weeks. It follows an earlier bellwether verdict this spring that already found Meta liable for contributing to a young woman’s mental health injuries.
Whatever the outcome, the trial is a landmark moment. And watching it unfold, I found myself thinking less about Meta specifically and more about the pattern it represents — a pattern I’ve had a front-row seat to for forty years in this business.
Forty years of product meetings, and the question nobody asks
I’ve sat in a great many product design meetings over my career. I can tell you, without exaggeration, that in not one of them has there been a representative in the room, or even a passing discussion, about the potential social harm of the feature being introduced. The conversation is always, one hundred percent, about growth and engagement. How do we get more people to install this? How do we get them to open it every day? How do we keep them here longer?
That wasn’t always the industry’s center of gravity. When I started out, we were selling packaged software to businesses. In the 90s, that same business-to-business model migrated onto the web. The earliest consumer-facing uses of the internet were mundane and useful — companies putting up web forms so you could book a flight, sign up for a service, or check your bank balance. Nothing addictive about any of that.
Then, in the mid-2000s, social networks arrived, and something changed. Facebook emerged from a crowded field — MySpace and others — and the engagement numbers it was showing potential investors were unlike anything anyone had seen. That triggered a genuine panic among investors to get in early, and from that point on, the entire industry’s definition of success shifted. Hypergrowth in the consumer base became the barometer. How fast could you scale? Monetization was often an afterthought — the real question was what features would get people to install the app, keep it installed, and open it daily. That is, I think, the moment that set the current reckoning in motion. And more recently, tech has gone a step further: in many corners of this industry, the explicit definition of success isn’t just growth — it’s attaining a monopolistic position outright.
The problem with how we regulate harm
Here’s what strikes me about the Meta trial, and about the wave of similar litigation before it: our legal system is built to respond to harm only after it has already happened. A civil tort trial requires proof of damages — you have to show that real harm occurred before a court will even hear the case. So the sequence is always the same. A company starts up, grows to enormous scale, some social harm becomes impossible to ignore, and only then do we end up in a courtroom arguing over money.
But by the time a trillion-dollar verdict is even on the table, the damage is done. The growth that built the company happened at the expense of actual people — people whose lives have been upended, who’ve gone through serious financial hardship, who’ve developed real health and mental health problems, and in the worst cases, people who have died, directly or by their own hand. A settlement or judgment, however large, doesn’t undo any of that. It’s the market’s after-the-fact way of correcting itself, and it’s a genuinely terrible way to protect people, because it only works once the harm is already irreversible.
I want to be clear that I don’t think the answer is heavy-handed regulation of every startup from day one. Silicon Valley’s traditional argument — that overregulating how businesses get started and enter markets would stifle the innovation that gave us things like Facebook, Uber, and DoorDash — is a fair point, and largely a correct one. I’ll grant one exception: Uber’s early growth involved knowingly bending and breaking local taxi and livery laws, and that’s a genuinely different case. But in general, we do want young companies to be free to build, experiment, and take risks.
A social contract for founders
So here’s what I’ve been thinking, and it’s an idea I’d like to see taught at business schools, in ethics classes, right alongside the standard startup playbook.
Start your business. Grow your business. Do what you need to do to succeed. But go in aware of a social contract: once your company crosses a certain threshold — and reasonable people can debate exactly where that line is, whether it’s the number of people affected, or the percentage of the population your product touches — you take on a new obligation. At that point, your company becomes subject to regulation, and it’s on you to help shape what that regulation looks like, rather than waiting for it to be imposed on you after something has gone wrong.
Think of it as an analogue to the S-1 process. When a company prepares to go public, it doesn’t wait until the IPO is imminent to get its financial house in order — venture-backed companies build the processes and controls appropriate to a public company from a very early stage, often almost from the get-go, because they know that day is coming. I’d propose something similar here: once a company reaches meaningful scale, it should be expected to prepare a statement — essentially its own regulatory S-1 — laying out how its business should be regulated, and to work with government to actively craft rules that prevent social harm, or mitigate it if some has already occurred. The goal is to never end up in a courtroom facing a trillion-dollar judgment because harm went unaddressed for a decade.
I actually think this could benefit companies, not just the public. If a founding team knows from day one that regulatory scrutiny is coming once they hit scale, that knowledge changes the conversation inside the company from the very beginning. It means someone in that product meeting finally has to ask the question I never heard asked in forty years: what harm could this cause? What regulations might we eventually be subject to, and how do we get ahead of them? That conversation, happening early and often, is worth infinitely more than a class-action settlement negotiated after the harm has already been done, and after real people have already paid the price for someone else’s growth chart.
Sources on the current Meta trial:
Meta faces federal trial demanding $1.4 trillion for alleged teen harms – Washington Post
‘Profits won.’ The child safety trial against Meta kicks off in federal court – NPR
Meta Stares Down Trillion-Dollar Threat as Landmark Social Media Trial Begins – Bloomberg
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meta-lawsuit-social-contract.md
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