2026 Cases Impacting The Entertainment Industry

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There have already been several cases this year that directly or tangentially impact the entertainment industry, and this article provides a brief summary of them.
1. The California Addiction Case. In a landmark decision, a jury found Meta and YouTube liable for intentionally designing their systems to be addictive by using features such as infinite scroll, autoplay, and push notifications. Critically, the case was brought by one private party and not as a class action, and the judgment was for $6 million, so the floodgates have opened for similar suits by anyone, and the flood has started.

To some extent, the point of all entertainment is to “addict” the public, since the more eyeballs or time spent, the better, particularly when there is adjacent advertising. The streamers could be accused of “addiction” with features such as “Auto-Play,” “Skip Intro,” and the increasingly prevalent TikTok-style “short-clip” discovery feeds. In addition, the entire market for “mini-dramas” is based on providing a few free episodes to “hook” the viewer into subscribing, and the entire video gaming industry is built on encouraging repeated use. It may not be long before plaintiffs’ attorneys attempt to push the boundaries of the case by suing these companies.

2. The New Mexico Addiction Case. In another landmark decision in a case brought by the state of New Mexico, a New Mexico jury found that Meta knowingly created a public nuisance, violated consumer protection laws, and exposed minors to mental health risks, addictive algorithms, and sexual exploitation. Critically, the damages assessed were almost $1 billion. The size of this verdict scared Meta into recently settling a similar case brought by 47 other states for a total that could reach $18 billion. However, this settlement only applies to claims brought by the 47 states and does not stop private parties from suing.

a. Liability for Infringement. The Supreme Court held that an internet provider could only have contributory liability for copyright infringement by its customers if the internet provider “actively encourages infringement through specific acts” or if the service is “not capable of substantial or commercially significant non-infringing uses.”

The immediate relevance of this decision will be to all the AI companies, most of which are popping champagne based on the decision. However, some of those companies do “actively encourage infringement through specific acts,” and my bet is that the studios successfully rely on this decision in their pending cases against Midjourney and MiniMax to find them liable for infringement by their customers based on their active encouragement of infringement. It is one thing to be a passive internet provider and quite another to upload for customer access the very content being infringed, particularly when the business model is, “Come and get it!” Indeed, in May the lower court hearing the MiniMax case declined to accept MiniMax’s defense on this basis. The court also held that MiniMax may be held directly liable for infringing uses created by its customers.