7-minute read | 1,650 words
What to know this week
Governor Newsom signs a new order on AI worker displacement.
California Governor Gavin Newsom signed an Executive Order (EO) directing state agencies to overhaul labor policies given the potential for sweeping AI job displacement.
Meta’s bid to challenge the Vermont social media addiction case fails.
The Supreme Court has declined to hear Meta’s challenge to a Vermont lawsuit, which alleges that the company intentionally designed its social media platform to addict minors.
This week's full stories
Newsom signs new AI-related EO.
THE NEWS
Last week, California Governor Gavin Newsom issued a new EO focused on potential AI job displacement. In the EO, Governor Newsom directed state agencies to work with AI developers, labor groups, and experts to study ways to increase job security as AI becomes increasingly sophisticated. More specifically, the EO calls for:
- Ways to subsidize companies to prevent AI job replacement.
- The expansion of job training programs for fields likely to be the most impacted by AI.
- Examining universal basic capital, which would give all residents stakes in assets, like stocks, bonds, or wealth funds.
When signing the EO, Governor Newsom stated:
“California has never sat back and watched as the future happened to us, and we won’t start now…This moment demands that we reimagine the entire system, how we work, how we govern, how we prepare people for the future.”
This EO is the first of its kind, as fears related to AI job replacement have continued to grow.
THE KNOWLEDGE
This latest state EO comes after fears of AI job replacement have continued to intensify. Already, major tech firms have begun cutting a large number of jobs in favor of more AI-focused initiatives. For example, in mid-May, Meta laid off 8,000 employees alongside reassigning another 7,000 employees to support new AI initiatives.
This trend was likely one of the key reasons that Governor Newsom signed this new EO. However, outside of solely focusing on preventing job replacement, the federal government has launched several initiatives designed to retrain employees to better utilize AI.
For example, the US Department of Labor established the following:
- AI Literacy Framework, a document aimed at providing a foundation to guide nationwide AI literacy efforts in both workplace and education settings.
- A national contracting effort to accelerate AI skill integration into apprenticeship programs to improve embedded AI training and strengthen workforce pipelines.
- AI in Registered Apprenticeship Innovation Portal, a website designed for organizations to help improve AI literacy and create AI-focused apprenticeships.
While upskilling the workforce to be more AI-enabled is critical, it does not fully address companies that are looking to replace parts of their workforce in favor of AI automation. Similar fears have emerged previously during the introductions of other automation tools, such as industrial digitization and robotics. However, unlike prior innovations, AI threatens not only repetitive tasks but also generative knowledge-based professions.
While some have argued that AI will primarily augment workers and create categories of employment, others warn that rapid advances in generative AI could compress job transitions faster than markets can adapt.
THE IMPACT
California’s EO may signal the beginning of a potential policy shift for how governments approach AI-related job disruption. Until now, most public sector efforts have focused on retraining and upskilling workers to use AI more effectively. However, Newsom’s order suggests some policymakers are beginning to consider whether governments should also intervene to reduce workforce displacement itself.
This creates a difficult balancing act for policymakers. AI has the potential to dramatically improve productivity and support economic growth, but aggressive automation could also place unsustainable pressure on labor markets. Governments may increasingly face pressure to determine how to encourage AI innovation without contributing to greater unemployment or economic inequality.
Supreme Court declines to hear Meta's challenge to social media addiction lawsuit.
THE NEWS
On Tuesday, the Supreme Court declined to hear Meta’s bid to avoid a lawsuit filed by Vermont’s attorney general. In Meta’s bid, the social media platform argued that the courts in Vermont lacked the jurisdiction to oversee the dispute.
For greater context, this lawsuit was originally filed in 2023 with Vermont’s district attorney general Charity Clark accusing the company of intentionally designing its social media application, Instagram, to be addictive to young users. More specifically, the suit argues that the company violated the state’s consumer protection law and that Instagram studied teens’ neurological, cognitive, and psychological vulnerabilities in an effort to get them to use the application compulsively and excessively.
Previously, Meta had attempted to file a similar bid to Vermont's Supreme Court, but that bid was also rejected in 2025. At the time, Vermont’s court wrote:
“A company that reaches out and purposefully avails itself of a forum state’s market for its own economic gain can expect to be hauled into court in that jurisdiction to account for its conduct related to those business activities.”
THE KNOWLEDGE
This recent legal setback for Meta is reflective of a much larger national legal challenge facing the company. In recent months, Meta has faced and lost several high-profile cases surrounding its social media platform’s impacts on minors. These cases have been filed by individuals, municipalities, and states alike across the US.
Some of the other high-profile cases facing Meta include:
- A New Mexico jury ordered Meta to pay $375 million in civil penalties after the company was accused of misleading its users about child safety.
- A Los Angeles jury found Meta negligent for designing social media platforms that are harmful to young people, awarding $6 million to a woman.
- A case that Meta settled in Kentucky involving school districts seeking compensation for having to combat a mental health crisis fueled by these platforms.
- A Massachusetts case that echoes Vermont’s complaint regarding intentionally creating addiction features.
Each of these cases is representative of a growing movement across the country to hold social media platforms accountable for their built-in design features. As these cases continue to progress, their results could have dramatic implications for both Meta and social media platforms in general.
Notably, many of these lawsuits increasingly focused on platform design decisions rather than user-created content. This approach has the potential to help plaintiffs avoid some of the traditional legal protections technology companies have under Section 230.
THE IMPACT
While the Supreme Court’s refusal to hear the case does not represent a ruling on Meta’s liability, it does allow another major lawsuit targeting social media design practices to continue advancing through the courts. As more cases survive early dismissal attempts, technology companies will likely face growing legal exposure tied not just to content moderation decisions but also to underlying design features of their platforms.
Increasingly, plaintiffs are attempting to frame social media harms about product design, recommendation algorithms, engagement mechanics, and addictive platform features rather than around user-generated content. This diction is critical and has already resulted in cases being tried differently than previously done before.
If these cases continue to gain traction, social media companies may face increasing pressure to redesign platform features, such as infinite scrolling, algorithmic recommendation systems, and autoplay, and could face heightened legal and regulatory scrutiny in the years ahead.
This Week's Caveat Podcast: The bipartisan case for CISA.
Dave Bittner and Ben Yelin take a deeper look at CISA’s recent budget cuts and the reactions from lawmakers. Throughout the conversation, Ben and Dave look at how lawmakers from both sides of the aisle are showing greater support for CISA after the Trump administration cut both its budget and its workforce. Both Representatives Don Bacon and James Walkinshaw voiced their support for the agency, emphasizing that it was essential to protecting civilian networks and critical infrastructure.
OTHER NOTEWORTHY STORIES
Google appeals US court ruling on search monopoly.
What: Google announced it will appeal a federal court ruling that found the company held an illegal monopoly over online search and advertising services.
Why: On Friday, Google announced it was filing its appeal against US District Judge Amit Meta’s 2024 ruling, which found that the company had an illegal monopoly. In the appeal, Google argued that Judge Meta made legal errors in his ruling and that its private arrangements with firms, like Apple, did not prevent competitors from succeeding.
In the filing, the company stated that it excelled in the market fairly by creating a “superior search engine through hard work, bold innovation, and shrewd business decisions.”
MAY 22, 2026 | Source: Reuters
Trump postpones AI Executive Order.
What: President Trump announced he is postponing signing an AI-related Executive Order.
Why: Last week, President Trump announced he is delaying the signing of an AI Executive Order citing concerns that it would undermine the nation’s AI competitiveness when compared to China.
In a statement, President Trump emphasized:
“I think it gets in the way of, you know, we’re leading China, we’re leading everybody, and I don’t want to do anything that’s going to get in the way of that lead.”
The order was reportedly focused on creating a voluntary framework for AI developers to work with the federal government before the public releases of advanced AI models.
MAY 21, 2026 | Source: Reuters
Meta settles social media addiction case.
What: Meta settled a federal lawsuit over social media addiction.
Why: Last week, Meta settled a lawsuit weeks before the case was set to kick off on June 12th. The case’s other defendants, YouTube, Snapchat, and TikTok, all settled last week.
The district attorneys emphasized:
Their “focus remains on pursuing justice for the remaining 1,200 school districts who have filed cases.”
A Meta spokesperson commented on the settlement, stating:
“We’ve resolved this case amicably and remain focused on our longstanding work to build protections like Teen Accounts that help teens stay safe online, while giving parents simple controls to support their families.”
This settlement follows a court ruling in New Mexico that found Meta liable for compromising children’s safety and a California case that found both Meta and Google liable for causing a woman’s depression.
MAY 21, 2026 | Source: The Hill