Facebook-Instagram Securities Investigation


Girard Sharp is investigating reports that Facebook knows its social-media platform Instagram causes harm to millions of users, but has failed to take adequate remedial steps in response while publicly downplaying the potential adverse effects of Instagram use.

According to a September 14 report in the Wall Street Journal, Facebook’s internal research showed that Instagram can be especially toxic for teenage girls who spend time on the platform.

The trading price of Facebook’s stock has dropped steeply since its awareness of Instagram’s harmful effects and related inaction came to light.

Have you invested in Facebook? Talk to an attorney.

If you invested in Facebook, you may be entitled to relief. Protect your rights by speaking with a Girard Sharp securities attorney. Call us toll-free at (866) 981-4800 or by filling out the form below:

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Facebook’s Concealment of Instagram’s Potentially Harmful Effects

Facebook, which owns Instagram, reportedly conducted research into how Instagram affects users, and found that the app can harm their mental health. The Wall Street Journal reported that although top-level Facebook executives are aware of these serious negative effects, Facebook has made little effort to address them.

The Journal reported that in March 2020, Facebook concluded that for 32% of teenage girls who felt bad about their bodies, Instagram made them feel even worse. An internal presentation reportedly also concluded that, among teens who reported suicidal thoughts, 13% of UK users and 6% of U.S. users traced those thoughts to Instagram. Even as it reached these conclusions, however, Facebook has consistently sought to minimize the mental-health problems associated with social-media use.

Rather than disclosing Facebook’s internal data showing the risks of user harm, Facebook executives have pointed to data from the Oxford Internet Institute suggesting only minimal association between social-media use and mental-health problems. The lead researcher on the Oxford studies commented that “Facebook needs to be more open about their research.”

Adam Mosseri, the head of Instagram, told the Journal that Instagram’s impact on users may be “quite huge” and that he has been trying to convince Facebook executives to implement measures to ensure safe and responsible use of Instagram.

Researchers within Facebook reportedly presented findings about the app’s negative effects to top executives, including CEO Mark Zuckerberg, who nevertheless continued to defend the app. In a May 2021 press conference, Zuckerberg said that using social-media apps to connect with others can have “positive mental-health benefits.”

Facebook has declined to make its research available to academics and lawmakers who requested it. Many of the negative effects have been found to be linked to Instagram specifically, and not to social media at large.

Facebook’s share price declined after the news broke of its reported concealment of the detrimental effects of Instagram use, particularly on teenage girls.

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We have recovered over a billion dollars for our clients against some of the nation’s largest corporations, such as Raymond James, Peregrine Financial Group, and OppenheimerFunds, in cases arising from securities fraud, false advertising and other unfair business practices.  

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