Blain’s Morning Porridge March 26th, 2026 – The Truth is Out on Social Media
“Do no evil was the biggest lie ever heard in the valley.”
Social media is deliberately addictive? Who knew? While markets barely reacted to yesterday’s Product-Liability award against Meta and Alphabet in California, the growing pushback against Big Tech will see valuation multiples diminish over the long run as increased regulation becomes inevitable. Perhaps it’s time to look at how Tobacco firms have evolved to understand the future value of Social Media parasites?
Apologies to Morning Porridge readers, listeners and viewers for the last week of silence. I was on the slopes – catching a last Ski-trip of this season to Chamonix. 5 days of fantastic conditions and a wonderful time with great friends. I had intended to write about markets – but waking up to the view of the mountains? Poetry in motion, or bond prices? Go figure.
We only get to live once – in an this increasingly fraxious, insane and unpredictable world…. who knows when or where I will ski next? On the mountains I am still in my twenties, dodgy-ticker and aching joints forgotten, addicted to my SkiTrax app…. Not the grey-haired old man who labours to write the Porridge each morning. (Sadly, I lost my notes when I left my iPad on the plane last night!! Darn!)
As I step back to the desk this morning, there is no shortage of stuff to write about – I am already digging into the latest wobble in private credit, and who knows where Iran goes? (Nowhere good I expect.) A fuller analysis on where the World might be headed will follow tomorrow, but let’s start with yesterday’s Judder Moment for Google and Meta.
The Tide is Changing on Social Media
What would happen to the global economy if we give every kid whose life has been “blighted” (in some form) by Social Media $3 mm in damages plus $30mm in punitive damages? The consequences would be phenomenal – and devastating. Who would bother seeking a job? What would it mean for global inflation? The industrialisation of the court systems with billions of cases to adjudicate?
Let’s say there are 3.5 bln young-people on the planet under 27 with a potential claim that their lives were ruined by social media. (“I would have done my homework, but pictures of cute kittens were just so hypnotic!”) Let’s say they each get $1mm.. Wow… $3500 trillion? Well… that aint going to work. But redistributing the personal wealth of Tech Lords like Mark Zuckerberg ($225 bln at the last count), Larry Page ($240 bln), and Sergey Brin ($240bln) – could certainly ameliorate some of the harms that have been done by Social Media. With power and wealth comes responsibility – a fact Zuck et al would like to gloss over.
It’s funny to remember Google’s original marketing gimmick and motto was “Don’t be Evil”. It was actually enshrined in the company’s employee handbook and codes of conduct. You won’t find such nonsense anywhere in the corporate HQ’s that litter Silicon Valley today. I could never understand Facebook’s appeal – originally a scoring system for ranking hot-babes on campus, Zuckerberg has always has the mein of something well dodgy.
Yesterday’s market reaction was interesting. The two stocks (Alphabet and Meta) barely moved – the market seems uncertain and unwilling to place bets on whether the $3 mm product liability settlement (and a further $30 mm claim for punitive damages) will be over-turned on appeal. Traders appear unwilling to price a future where the threat of legal action hangs over the extraordinary earnings power behind social media.
Yet, the risks to social media platforms are huge – there are (according to the media this morning) at least 100,000 similar claims pending. While yesterday’s $3 mm award ain’t even a rounding error on Social Media profits… $3 or $30 billion in cumulative damages would be.
Let’s be brutally honest about what the social media firms are – they profit by monetising our attention on the streams of social media pap they stuff into our eyeballs. They monitor our mail, our likes and dislikes and feed us carefully curated processed media stodge with the intention of opening our wallets to firms that want to see us crap. Make the mistake of opening one ad for a pressure jet-wash attachment, and you can guarantee your feed will be full of similar tosh for days. They are pivoting to AI to maintain income and control.
It’s possible to argue it’s entirely our own fault if we watch the streams of media drivel… If we are weak enough to fall for it… then we deserve to pay the costs. I disagree with that – our weaknesses have been weaponised against us. They have been callously identified and exploited. That’s why everyone is now comparing Social Media to Tobacco or Oxycontin.
To sell themselves to advertisers, the algorithms used by Social Media firms are designed to make us keep watching. And it works. The consequences, especially on young minds that don’t know any better can be devastating. That’s what the case in the US found: social media platforms are addictive for children, and therefore Google and Meta are responsible for the anxiety, depression, body dysmorphia and generally awful childhood of the 20-year old plaintiff.
As we’re all aware… it’s not just children who are influenced by targeted social media. If you fill a person’s news feed with stuff they like and engage with, social media firms can engage more deeply to sell them stuff, even if it means filling their minds with fake news, and extreme right or left-wing perspectives. As we are seeing in deeply polarised politics and in political failure, the consequences of Social Media are huge – as will be the consequences of AI.
We’ve known about how to influence people for millennia – social media is the same thing on an industrial scale in the pursuit of naked profit. It works. In the last few years the Social Media firms have seen their take of global advertising soar. TV companies are dying because Google & Meta have become a market duopoly – it’s far more effective to target ads directly to people than drop them on a screen to hope they might stick.
There is now a trend to reverse the power of Social Media. Banning kids from social media sites has become a vote winner. It’s now recognised they are deliberately designed to be addictive, and their power to sell anything from nasal hair trimmers to extreme ideologies is now recognised.
Regulation and the depowering of social media platforms is inevitable. It is going to happen and it is going to accelerate as more and more cases come to courts and the sheer scale of social media manipulation becomes increasingly clear. Let’s not forget the abomination that is on-line gambling – preying on the weak and desperate in society.
Where will that leave Social Media firms? The Tobacco companies today are still large and profitable businesses. Sure they still sell a highly questionable addictive product, and they’ve diversified into new “safer” ways of feeding nicotine demand. They survived a switch from the unregulated market to what is now a highly regulated market – and could therefore be a model for the future regulation of social media!
Out of time and lots to catch up on..
Bill Blain
Author of the Morning Porridge
Advisor – Spitfire Strategic Capital
