A high-profile trial underway in California is challenging how social media companies design and deploy their algorithms. Meta, Alphabet and ByteDance are among the defendants facing claims that their platforms are built to encourage addiction and cause mental harm. The case stands out by targeting the underlying recommendation systems rather than user content, potentially weakening long-standing legal protections that shield platforms from liability.
If courts begin holding firms accountable for how algorithms shape user behaviour, it could trigger a wave of litigation and accelerate regulation. Business models built on engagement could face higher compliance costs or constraints on personalisation tools, which are central to advertising revenue.
Operational risk was also in focus this week as TikTok suffered a major outage in the US. Hundreds of thousands of users reported issues with content visibility. The company blamed a power failure at one of its data centres and said it was working with Oracle to avoid recurrence. Meanwhile, Microsoft received approval to build 15 new data centres in Wisconsin. The nearly nine-million-square-foot development reflects confidence in long-term demand from AI and enterprise cloud customers.
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