• Marketing representations

  How have platforms been marketed to users, particularly younger users? If platforms have been represented as safe, educational, or suitable for adolescents, those representations will inform the level of safety consumers are entitled to expect.

• Warnings and knowledge of risk

  Have platforms provided adequate warnings about the risks of compulsive use, the addictive qualities of engagement-maximising features and the potential mental health consequences of platform use?

• Reasonable expected use

  Prolonged and intensive use is not merely foreseeable: it is the intended outcome of engagement-maximising design features. An Australian court may hold that a platform designed to maximise time-on-platform cannot rely on the defence that excessive use was not a reasonably expected use of the product.

• Time of supply

  The continuously evolving nature of digital platforms complicates the application of a time-of-supply test. Unlike a physical product that is manufactured and sold at a fixed point in time, a social media platform is updated through software releases, algorithm changes, and feature deployments on an ongoing basis. Each update may constitute a new ‘supply’ for the purposes of the ACL – which will pose a challenge for claimants.

The risk for platforms under this head of claim is genuine, but liability is not inevitable. In particular:

• The relevant section of the ACL is directed to what the community is entitled to expect, rather than simply whether a safer design was available. Previous authorities on acceptable quality and safety also emphasise that safety is not absolute: consumers are taken to accept a degree of risk inherent in a product used as intended. Many ordinary products are designed to be habit-forming without being defective, although the position may differ when it comes to children.
   
• Part 3-5 of the ACL is framed around physical safety and, historically, around personal injury and property damage. As such, applying it to diffuse psychological harm arising from patterns of use over many years, in which the user’s own conduct and a wide range of other causes are implicated, would take the regime beyond its familiar territory. 
   
• Statutory defences are also available: f example, platforms may seek to rely on the state of scientific and technical knowledge at the time of supply, which may be significant given the continuing debate over whether social media use causes, rather than merely correlates with, adolescent mental ill-health. Causation remains a central difficulty: a claimant must prove that the alleged defect caused their particular loss, against a background of potentially significant confounding variables on which platforms are likely to rely.

3.    Has there been a failure to warn? 

A failure to provide adequate warnings about known risks is a well-established basis for product liability under the ACL. If a social media platform operator is aware (or ought reasonably to be aware) its platform’s design features contribute to compulsive use, anxiety, depression or other mental health harms, the failure to disclose those risks to users (and, in the case of minors, to their parents or guardians) may constitute a safety defect under the ACL. The publicly available ‘whistleblower’ information (in the case of Meta) is likely to be significant despite challenges to the relevance and reliability of that material. If claimants establish an operator held internal research documenting its product’s mental health risks but failed to warn users, that failure may be difficult to defend.

4.    Has there been a breach of any consumer guarantees? 

The ACL’s consumer guarantee regime imposes statutory guarantees that goods supplied to consumers will be of acceptable quality and reasonably fit for any disclosed purpose. If a social media platform is characterised as a ‘good’, these guarantees will apply. Relevantly (assuming social media platforms are a good):

• The guarantee of acceptable quality requires goods be fit for all purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe, and durable. A platform that is designed in a manner that renders it addictive and harmful to users may fail to meet the standard of acceptable quality, particularly if the addictive design features are not disclosed to users.
   
• The guarantee of fitness for purpose may be engaged where a consumer acquires a platform for a particular purpose (such as social connection or entertainment), and the platform is not reasonably fit for that purpose because its design prioritises engagement maximisation over user wellbeing.

If the supply is instead characterised as a service, the applicable guarantees require services to be provided with due care and skill and to be reasonably fit for a disclosed purpose. 

5.    Has there been any misleading or deceptive conduct under section 18 of the ACL? 

The ACL prohibits conduct in trade or commerce that is misleading or deceptive, or likely to mislead or deceive. This provision may be engaged where an operator’s representations about its platform’s safety, suitability or benefits are false, inaccurate or incomplete. For example, marketing a platform as safe for teenagers while internal research shows harm to teen mental health could constitute misleading or deceptive conduct. Similarly, representations about the effectiveness of safety features, parental controls or age-gating mechanisms that are inadequate could expose the operator to liability. A misleading or deceptive conduct claim also avoids the goods-or-services question and does not require proof of a safety defect. 

On the other hand, broad statements of corporate aspiration may amount to non-actionable ‘puffery’ and statements of opinion or future intention also require careful consideration, including whether the operator had reasonable grounds for them when made. 

What does this mean for Australian claims?

For businesses operating social media platforms in Australia, scrutiny of platform design is likely to increase. The immediate question is how to respond to the consumer claims now emerging and those being investigated by class action firms.

For claimants, the legal framework is already in place and the US evidence is now a matter of public record. Australia’s under-16 ban also arguably signals public policy concerns about risks to children. However, the obstacles should not be understated: characterisation, the application of traditional safety concepts to psychological harm, statutory defences and, above all, causation each present substantial difficulties. No Australian court has yet considered these questions. 

Whether the product liability theory ultimately succeeds in Australia remains open. With Australian proceedings now underway, the focus is shifting from whether these claims will be tested to how Australian courts will apply the existing consumer protection framework. 

^{[1] New Mexico Department of Justice Wins Landmark Verdict Against Meta - New Mexico Department of Justice; Court Orders Meta to Pay $942 Million and Overhaul Protections for Children on Facebook and Instagram in Landmark New Mexico Ruling  - New Mexico Department of Justice}

^{[2] Jury reaches verdict in blockbuster Meta, YouTube social media trial}

^{[3] Meta Settles a School District’s Social Media Addiction Lawsuit - The New York Times; Google's YouTube settles social media addiction lawsuit brought by Florida teen | Fox Business}

^{[4] Court Orders Meta to Pay $942 Million and Overhaul Protections for Children on Facebook and Instagram in Landmark New Mexico Ruling  - New Mexico Department of Justice}