Toronto’s CN Tower isn’t just the world’s biggest, most derelict TV antenna, in the coming years it could become the asbestos-filled, cigarette-shaped lightning rod that ushers in the post-social media era. In the same way Americans didn’t hear much when Canadian spent last week honoring the passing of their former Prime Minister, Brian Mulroney, we haven’t heard that a school board in Peel is suing TikTok, Snap, and Meta. So, here…
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The school boards of Toronto, Peel, and Ottawa-Carleton, along with Toronto's Catholic student sued the social media companies for $4.5B.
Rachel Chernos Lin, the chair of the Toronto District School Board, took to the audio airways of public radio to tell Canadians, “These social media companies ... have knowingly created a product that is addictive and marketed to kids.” She explained that she took her problem to lawyers in search of a solution.
With apologies to my friends of the legal persuasion, I had to order a drink to do a spit take. Lawyers. Solutions. Moving on and well beyond things like — well, let’s just sue Coke. They make and market an addictive product. Or video games companies. Or for that matter, Nickelodeon, Disney, and — the curiously absent — YouTube. Sidebar, props to Google for somehow not letting anyone regularly apply the phrase “social media” to YouTube.
Let’s also ignore parental dereliction of duties and how in the heck kid’s addictions are the school boards problem, or how the government who runs schools will use windfall money, or how they arrived at four point five billion. Because, I’m a media and media economics guy and I’m going to focus on the media and media economics of this story.
As far as I know you can make addictive products. You can make products that can do harm. You can sell those products. You can make money selling those products. You can even market those products. If any of that is wrong, I have a pair of bear arms in the trunk of my electronic vehicle that says otherwise.
There are three outcomes. One is that social companies win the case. Let’s ignore that because that means the status stays quo. The other two outcomes topple apple carts. Either the school boards win outright or they get social companies to settle and issue a statement to the effect, “The billions of dollars we are paying the school boards is in no way an admission of guilt because we did nothing wrong.”
Let’s examine those last two. To keep it simple, presume for a moment that these social companies pay out the $4.5B in multi-colored Canadian money with skaters on bills with see-through, tamper-proof windows. In American greenback terms, that’s about $3B.
Toronto you know. Their Raptors won the NBA Championship not too long ago. Peel is a suburb of Toronto. Ottawa has the Senators hockey team and it’s where Mulroney lived when he was Prime Minister.
(As of this writing) Meta and Snap are worth a combined $1.26T. TikTok is anyone’s guess. Let’s just say the whole kit and kaboodle is worth $1.5T. $3B is chump change. Hail on your wedding day stuff. Ironically, sung by Alanis Morrisette who’s from… Ottawa. This pittance is little more than ironic. A minor plague.
Which brings us to plague math. Around this time of year, with the same kind of variability that makes Greek Orthodox Easter hard to pin down on most Gregorian calendars, Jewish people like to tell the story of Passover. It’s like a novelization of the Ten Commandments. Not the one from Raiders. The movie with Chuck Heston. I’ve been around enough seder tables to know how the plague math goes. Ten plagues… frogs, lice, vermin, and such… applied by a finger. So, when you get to the outstretched hand, you multiply those ten by five fingers to get fifty. After pausing to eat some eggs and flat breads, you return to the story and various appendages bring the total number of plagues to like 250.
Toronto and Ottawa have sports teams. So do 49 other cities in the U.S. and Canada. So, multiply a potential $3B settlement by 51 (and divide by 2) to get a very ouchy $76.5B. That’s enough to wipe out Snap and smart Meta and TikTok. But if this suit plays in Pittsburgh, you have to know it will play proportionately well in Peoria.
Let’s evolve the math. About six million people live in and around Toronto. Another 1.5 million live in Ottawa and their neighbour (Canadians love “U”), Gatineau. Combined, that’s 2% of the combined populations of the U.S. and Canada. So, school boards in those two countires could sue social media for 50x $3B or $150B.
That doesn’t even account for the vastly larger but less litigious cities in Europe, Asia… among other places. So, the actual lawsuit number that could plague social media is more like 250x $3B, or $750B. That’s half value of these three social media companies.
It will take years for this suit to get to court. Add more years for appeals. But, if the outcome is a payout, if Peel et al smite social, it may bring the current social media era to an end. Asbesto-cigarette style.
Smitten. But not the good kind.