Algorithm and blues: a watershed social-media verdict

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The Economist. Hello and welcome to the Intelligence from the Economist. I'm your host Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. As the war in Iran is making crystal clear once again, geography really matters to geopolitics. We go around the globe looking at the maritime bottlenecks that have the power to shape both commerce and conflict. And animated films used to be a tiny part of the broader cinema diet. Not so anymore. Kids love them. Adults love them. Studios love them. We ask why they've become so reliably popular and lucrative. But first, As social media platforms have proliferated and consolidated and honed their games, a whole new vocabulary has developed around them. In web and then app design, the Infinite scroll was an innovation. No more clicking through pages that loaded one by one. By the late 2010s came doomscrolling a sense that as users were compelled to slide further into that infinitude, existential dread came along for the ride.

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This one Pan, chicken and Potatoes is my kid's favorite dinner.

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I'm gonna shoot this 2,000 pound highway barrier with higher and higher caliber bullets all the way up to a.50 cal

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and see what it can stop.

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Brain rot? Bed rotting? Goblin mode. All weird neologisms that reflect how compelling, even addictive, all that content can be.

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You're about to watch the best shot in golf history.

3:07

Are you curious to know what exercises Cristiano Ronaldo does for a six pack, I need to lose £40 for my vacation. What am I supposed to do? Obviously, not all of it is good for anyone, children in particular. But legal challenges to address the societal worries have fallen short. Until now, in what may prove to be a watershed case, Meta and Google, the firms behind Instagram and YouTube, have had to cough up damages to a plaintiff, not because of what she saw, but because a jury in Los Angeles backed her claim that it was all designed to make her an addict.

3:11

This is just one legal case in California.

3:46

Tom Wainwright is our media editor.

3:49

But the legal argument that it used was a novel one, which could crack open further changes in how social media operates around the world.

3:52

Okay, start with the details of the case.

4:02

So the complainant in this case is a woman called Kaylee. Her surname has not been revealed. She's now 20 years old. She started using social media when she was aged six. And she says that this quickly became an addiction, which saw her spending hours a day on apps including Instagram and YouTube. And she claims that these apps contributed to all kinds of mental health problems, from anxiety to body dysmorphia, to thoughts of self harm, and so on. And her lawyers showed the jury internal company documents from Meta and Google, the owners of these companies, demonstrating that executives knew of their product's harmful effects on children. And they argued that autoplaying videos, personalized algorithms, infinite feeds, features like this were designed to appeal to children. Now, Meta and Google denied this, but the jury sided with Cayleigh and awarded her $6 million in damages.

4:04

And so that's the novel legal approach here, to prove something more, I guess, about the design than the content.

4:55

That's exactly right. And I think this is the interesting point here. People have been launching these lawsuits against social networks for years and years, and they haven't really got anywhere because in the past, they focused on the content that these platforms are publishing. So there was a case in 2023, for example, which made it all the way to the Supreme Court in the States, where Twitter was accused of terrorist material on its network. And the social networks have never really been found liable for this because there's a legal detail called section 230 of the Communications Decency act, which basically exempts them from liability for any content published on their platforms. And without this, it would essentially be impossible to operate an open social network with millions of users if you were liable for everything that they posted. This legal case took a different approach. Rather than focusing on pieces of content and saying, look, Instagram shouldn't have posted this self harm material or whatever, it focused instead on the design of the platforms. So looking at ways in which Instagram and YouTube in this case had implemented features which tempted users to keep coming back and which fostered addiction, including in children, this is a new approach and it seems that the jury bought it. And the question now is whether other juries might buy it in the same way.

5:01

And what do the companies themselves say about that verdict?

6:13

Well, they've said that they disagree. Not surprisingly, they both said that they're going to appeal. So we'll see where that goes. Supporters of the complainant, meanwhile, are celebrating. There are thousands of people who believe that social media have harmed them in some way and they all see this as a collective victory for them. Among those advocates is a group of mothers whose children killed themselves.

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It's really validated in a complete validation of what we've been screaming on the top of roofs about for years. This was not a, this was a conscious decision that they made. It was not an accident and parents are not to blame.

6:35

And I guess the point here is not this one verdict, but that it's perhaps the thin end of a very, very big wedge.

6:51

That's exactly right. I mean, there are eight more cases coming up in California that people are particularly interested in. Thousands of lawsuits have been launched by people claiming that they've been harmed by social media. And some lawyers are comparing this to the moment in the 20th century when big Tobacco faced thousands of complaints by people claiming, correctly, that their health had been harmed by smoking. So this could turn out to be a big tobacco moment for big tech.

6:57

And so where do you see this going, Tom? Is this going to be then a great many lawsuits with damages that dent the balance sheets of these companies, or is this a route to regulation that tries to address those harms?

7:21

I think it's the latter. I mean, the money really isn't all that significant to these companies. The $6 million that they were told to pay this woman amount to about one thousandth of 1% of their combined annual revenue. So it's not about the cash in

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this instance, perhaps all the thousands of people behind her though.

7:46

Well, yeah, exactly. When you add that up, I think that it's going to force them to make changes to avoid that kind of massive scale liability for their billions of users. And so I think that the risk from their point of view is that they are forced to change or remove some of these supposedly addictive features, which of course are the very features which have made their apps so popular in the first place. And America is not the only place doing this. In February, the European Commission found that TikTok was in breach of its laws for its supposedly addictive features. TikTok has said it's going to appeal, but in the meantime, unless it changes the design of its app, it risks a fine of up to 6% of the revenue of its owner, ByteDance. So I think change is on the way, not just in America. The general mood has really turned against social media in the past year or two. I would say we've seen governments taking action against social networks, particularly where they concern children. Australia is the obvious case here. Last year they banned under 16s from a range of social networks. And now lots of countries from Britain to Malaysia to Brazil are planning similar rules. And I think this has been caused by a shift in public opinion. I saw an opinion poll last year from Ipsos where they surveyed 30 countries about whether under 14s should be banned from social media, and a majority was in favor in every single one of those 30 countries. So I think governments have picked up that voters have changed their minds. And I think that we could be seeing more change on the horizon soon, both from governments and from courts.

7:49

Tom, thanks very much for joining us. Thank you.

9:18

This Economist podcast is sponsored by Bill, the intelligent finance platform that helps businesses and accounting firms scale with proven results with AI powered automation. Bill isn't just moving money. They're simplifying financial operations. For nearly half a million customers. Bill has securely processed over a trillion dollars in transactions. That's proven infrastructure. Ready to talk with an expert? Visit bill.comproven and get a $250 gift card as a thank you. That's bill.comproven. terms and conditions apply. See Offer page for details. Most all in one HR systems are a patchwork of disconnected and manual tools. Rippling is totally automated. If you promote an employee, Rippling can automatically handle necessary updates from payroll taxes and provisioning new app permissions to assigning required manager training. That's why Rippling is the 1 rated human capital management suite on G2, TrustRadius and Gartner. If you're ready to run the backbone of your business on one unified platform, head to rippling.com acastbiz and sign up today. That's R I P P L I N G Acastbiz to sign up.

9:30

It's still guesswork about negotiations going on between Iran and America. Iran's foreign minister said his country was exchanging messages with America through third countries, but that it had no intention of negotiating for now on President Donald Trump's 15 point ceasefire proposal. Mr. Trump said Iran's leaders are afraid to admit to talks, but it seems clear that Iran has its own red lines, including perhaps most importantly, sovereignty over the Strait of Hormuz. This tiny bit of geography is what may ultimately decide this war. The bottleneck, the sticky wicket, the choke point. And any student of history could have warned, probably did warn Mr. Trump.

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The importance of maritime choke points has been apparent since antiquity.

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Anton LaGuardia is the Economist's Diplomatic Editor.

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In the 5th century BC, when the Spartans were fighting the Athenians in the Peloponnesian War, they cut off what they call the Hellespont, which is today known as the Dardanelles, part of the Turkish Straits connecting the Black Sea to the Mediterranean, and thereby starved the Athenians and defeated them. Much later on In 2022, when Ukraine was invaded by Russia, its ports were damaged and it looked as though it would not be able to get its grain out. And that sent food prices rocketing around the world until a safe corridor could be created. All of which is to say that geography still matters.

11:45

So, Anton, let's talk about this in a general sense. First, about why they matter what the modern day bottlenecks are.

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Ships are still often the best means to transport cargo around the world, particularly when it's heavy and has got to go long distances. And often the shortest routes take them through narrow passages between islands or through man made canals. And in the post Cold War era, when globalization was spreading and relative peace dominated, nobody worried much about this. And you could have just in time, supply chains with components and pieces and whole manufactured goods coming from the other side of the world, because choke points didn't seem to be a problem. Only in recent years have we started to see them. For example, when a container ship ran aground in the Suez Canal some years ago, and then the Houthi rebels started to fire on ships using the Red Sea. And this closure of the Strait of Hormuz has been the most serious recent incident because it has trapped about a quarter of the world's oil production on the wrong side of that strait. And there's only one way in and out of the Persian Gulf.

12:29

So this is a matter not just of dependency on these bottlenecks, but a matter of defending them in lots of cases.

13:27

Clearly by their nature, shipping lanes take vessels close to shore, and if there are people ashore who want to interdict them, it makes it a lot easier. And I think four dangers really stand out to me. One is that technology is making that easier. You'll remember for example, that a few years ago, ships were being boarded by pirates coming from Somalia as they use the Bab Al Mandab Strait leading to the Red Sea. Now it's Houthi rebels shooting them and sinking them. So technology has had a big impact on what's been going on. A second problem is that there's just generally more war around, and war tends to spill over into the oceans, as we've seen in the Black Sea and now in the Persian Gulf. A third problem is that there is a growing risk of a superpower war as America and China shadow box with each other. Xi Jinping has said he wants to be able to take Taiwan by 2027. The Americans are revising their tact tactics, and their allies along the Western Pacific are boosting their defenses. So it is increasingly possible that there will be some kind of superpower war over Taiwan, say, or over the South China Sea. And then there's a fourth change that's happening, and that is that climate change is affecting things like the ability of ships to pass through the Panama Canal because of successive droughts. And more important, it is melting the ice cap, which means that the Arctic shipping routes become more possible, which will increase the importance of that. We haven't really thought about much, such as the Bering Strait between Alaska and Siberia.

13:33

So clearly, this is, when taken together, kind of a global problem in its way. But let's take it region by region. Let's talk about the Middle east outside of just Hormuz.

15:09

Well, the Middle east is hugely important to the economies of the whole world because it produces a lot of oil and gas, but it's also a very unstable region, despite the efforts of Gulf states to portray themselves as oases of calm and prosperity and fun in the case of. Of Dubai. The other set of problems, of course, is over on the Red Sea side and over in Israel, where there's been war with Gaza, war with Lebanon, and now an American Israeli bombardment of Iran, which in turn dominates the Strait of Hormuz and has been able to close it with relative ease. There's a possibility of a double blockage because Iran's Houthi allies sit on the Bab El Mandab Strait on the other side of the Arabian Peninsula. If you're trading in Saudi oil, you can't get your oil out of the Strait of Hormuz. You could pipeline it over to the Red Sea, but potentially you can't go south. So your only way is to try and go north, but your main markets are in the east. So you would have to circumnavigate all of Africa to get the oil to your customers. It's possible, but it's obviously more costly.

15:18

And along the way there, you mentioned Taiwan. Let's take a look at Asia more broadly.

16:22

The Straits of Malacca between Indonesia and Malaysia, and the Strait of Taiwan, which runs close to the Chinese shore, leading to Japan and Korea, carry perhaps a quarter of the world's trade by volume. And China has said that it wants to be able to take Taiwan by force. It practices amphibious invasion. It practices blockades and quarantines. And the Americans spend a lot of time thinking about how they might defend Taiwan and how they might do a counter blockade of China. They couldn't get close to the Chinese coast because it has a thick array of missiles that can hit ships at a distance. So it would probably try to do so at some distance, perhaps by blockading the many sea passages in the chain of islands that surrounds China, from Japan through to Taiwan, the Philippines, Malaysia and Indonesia.

16:26

What about Europe and points west?

17:14

Points west are complicated. You've had a war running since 2022 with Russia, which invaded Ukraine, with the Europeans trying to help the Ukrainians fend them off. So the first thing you saw was a spike in food prices because of the threat to Ukrainian grain ships and also Russian ships carrying fertilizer that has more or less steadied because there's secure route that they've developed, hugging the coast of NATO allies. And then if you look across the Atlantic at the Western Hemisphere, the Panama Canal has been hugely important to the United States ever since it built it at the turn of the 20th century. However, Donald Trump has been very upset that two ports at both ends of the canal have been in the hands of an operator from Hong Kong and therefore ultimately under Chinese control, and has put a lot of pressure on Panama to change things. And Donald Trump has also been concerned with the Arctic and his obsession with taking Greenland by force if necessary. Much of the consternation of European allies is to control sea lanes around the United States, particularly the Arctic routes.

17:16

Most countries are aware of the vulnerabilities here and are trying to shore up, to defend these choke points, to find ways around them. Do they get, over time, less bottlenecks on the world of commerce and peace. Do you think countries will look for

18:20

ways to diversify, to mitigate the risks, to become less dependent on particular choke points? But building roads and PIP pipelines and other infrastructure takes time. To some extent, countries will be hoping that international law holds, which seeks to protect the freedom of navigation and and of commerce, and has done so for more than a century. But in the end it comes down to who upholds that system. And for a long time it was a British Empire, and then thereafter it was the United States that took on that role explicitly. And even Donald Trump's America First National Security Strategy talks about keeping open the most important CP passages. But the question is, does he mean it?

18:34

Anton, thanks very much for your time.

19:17

Good to talk to you, Jason.

19:19

This is far too big a topic for us to handle in depth here, but you are in luck, dear listener. My colleagues over on Money Talks, our weekly subscriber only show on business, finance and economics, have done a great deal of straight talking on the subject. They meet with Edward Fishman, who wrote a landmark book on choke points, the geographic kind, as well as in supply chains and technology. And they'll be reporting from Ciroweek, the energy industry's big annual shindig in Texas, where one topic is going to absolutely dominate. Money Talks is out later today and every Thursday. Doc, I need your help, Mabel.

19:22

I'm in the middle of class, a class that you are enrolled in.

20:08

Hoppers is Pixar's 30th feature film.

20:14

Alex Selby Boothroyd is the Economist's head of data journalism.

20:18

It's about a teenage scientist who implants her brain or subconscious or consciousness into a robotic beaver and befriends the animals in a threatened forest. And she persuades them to rise up, starts a revolution which kind of gets out of hand. It ends with a flying shark and a big threat to society. It's a lot more fun than that makes it sound. It's one of a series of animated films that are coming out this year and which might well make 2026 the biggest year for animation. Next month, the Super Mario Galaxy movie will be coming out. There's Toy Story 5 coming out in June, Minions 3. These all have one thing in common. They're all part of a franchise. And animated studios have definitely seen huge returns from franchise films. If we look at just the last couple of years, Inside Out 2 was the first animated film to ever surpass a billion dollars at the box office. A Chinese fantasy film called Nezhatu has made over $2 billion. It's the seventh most successful film of all time. And Zootopia 2, which came out just at the end of last year, is well on its way to making 2 billion at the box office. There's a lot of money to be made from these films. I think there's a few good formulas or tricks that studios are using. One of the main things is they have universal themes. If you think back to the very beginning, Toy story in 95, everyone had toys. Most kids thought their toys were alive at one point. It's a universal story that anyone can relate to. If you look at Wall e, it's got 17 lines of dialogue. So it's not even about the language, it's about the emotions. And Inside Out. Inside out two, they both deal with feelings kids have as they're growing up. So it's something that parents can get on board with. Another reason animated films are really performing well, I think, is they have a global reach. They're not really going to get censored in different countries. As well as the global reach, they tend to have fantastical settings that are universally appealing. Wall E's in space, a few Pixar films which are set in sort of alternate universes. The main thing that makes these so appealing is the characters. Think of Ratatouille, his wide eyed wonder as he learns to cook. Wall E. The eyes, they couldn't get it right. They had these three lenses and it just kept looking like a camera lens until they made the middle lens white, like the white of an eye. And suddenly the whole thing came to life. These techniques really make these characters appeal to us as humans, even though they're not humans. Another aspect that's really helping these films take off at the box office is the timing. Ninja 2 was released at Chinese Lunar New Year. Zootopia 2 came out in Thanksgiving last year. There's a lot in his films for adults as well as for kids. There's jokes in Zootopia 2 that point to the Shining, to Pulp Fiction. I remember watching Shrek in the cinema and the grown man behind me sounded like he wet himself when he saw Princess Fiona doing the bullet time jump from the Matrix. I think we're going to continue to see animated films getting bigger and bigger. They've got universal appeal and it's a nice day out for their whole family to go to a cinema and watch them.

20:21

That's all for this episode of the Intelligence. We'll see you back here tomorrow.

24:18

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