META, SNAP, GOOG Stocks Fall After New York Mandates Mental Health Warnings On Social Media Platforms

• The warnings must be displayed when a young user initially uses a “predatory feature” and periodically thereafter, based on continued use, the New York governor said.
• Hochul highlighted that consumer warning labels for cancer or suffocation or photosensitive epilepsy are already found on a variety of different products.
• The legislation comes amid rising concerns about the use of social media on children’s well being.

New York Governor Kathy Hochul on Friday signed legislation requiring social media platforms to display warning labels on the dangerous impact certain features can have on young users’ mental health.

The new legislation requires social media platforms that offer “addictive feeds, auto play or infinite scroll” to post warning labels on their platforms.

Shares of Meta Platforms (META), Snap (SNAP) and Alphabet (GOOG, GOOGL) traded in the red at the time of writing.

“Keeping New Yorkers safe has been my top priority since taking office, and that includes protecting our kids from the potential harms of social media features that encourage excessive use,” Governor Hochul said. In a statement, the governor also highlighted that consumer warning labels for cancer or suffocation or photosensitive epilepsy are already found on a variety of different products including tobacco and video games.

The warnings must be displayed when a young user initially uses a “predatory feature” and periodically thereafter, based on continued use. Users will not be able to bypass or click through the warnings, he added.

Mental Health Crisis Fuels Concerns

The legislation comes amid rising concerns about the use of social media on children’s well being. Former U.S. surgeon general Vivek H. Murthy called for warning labels on social media platforms last year in an opinion piece on The New York Times while terming the mental health crisis among young people as an emergency. Social media has emerged as an important contributor to the crisis, he alleged, citing studies which found a connection between social media use and anxiety and depression symptoms.

Several U.S. school districts have also sued Meta and other social media platforms for allegedly fueling the mental health crisis among youth.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around SNAP stayed in the ‘neutral’ territory while sentiment around GOOG and META stayed at ‘bearish’ levels.

While GOOG stock gained 65% this year, META gained 13%. SNAP stock, however, dipped 27% this year.  

Also See: Former ULA Chief Tory Bruno Roped In At Bezos’ Blue Origin Amid Intensifying Launch Race

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