U.S. Sends Iran Plan to End War

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In a landmark verdict, Meta is found liable for allowing adults to pray on children.

Plus, mediators push the U.S. and Iran to talk to the sides remain far apart.

The rights haven't responded.

There is no talks, there's no discussion, they haven't agreed to meet,

and even they actually feel it could be a trap that it could be just a proposal to easel prices.

And China's Communist Party cracks down on wine.

It's Wednesday, March 25th.

I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News,

the top headlines and business stories moving your world today.

Meta has been found liable for failing to protect young people from a range of online dangers,

including sexually explicit content, solicitation, and human trafficking.

That was the conclusion of a New Mexico jury yesterday.

A verdict partially read out here by Judge Brian Beechield.

On question one, did Meta violate the unfair practices act by engaging in an unfair or

deceptive trade practice? The jury answers yes.

Question two, did Meta act willfully by engaging in an unfair or deceptive trade practice?

The answer is yes.

I asked journal tech reporter Sam Shekner to help untangle the verdict.

This is a case under state law, and the state is using its particular code to go after a

company. But if you step back, what we see is a state presenting evidence that a company

allegedly ignored warnings about the dangers on its platform, and that the state argues that

its design features let pedophiles engage with children. And what I think it shows is a new

willingness by states, by courts, and now juries to hold social media companies responsible

for what happens on their platforms. And that's the verdict and a trend that goes beyond

even Meta and beyond even social media. You told me offline Sam that there's a bit of a split

happening here. These social media companies are under pressure sort of globally right now,

but how that is being pursued in the US has some distinctly American features compared to what

we're seeing elsewhere. There's been I think building for a decade now a sort of backlash

against some of the perceived harms from social media. We had the Facebook files at the Wall Street

Journal looking at internal documents from what was then Facebook and has since been renamed Meta.

And in Europe, for instance, the EU passed the Digital Services Act, and that's a law that

basically holds companies responsible for content on their platform and threatens them with big

signs if they don't have robust systems for moderating it or handling potential problems.

In the US, there's no nationwide law that does that. There's some consumer protection law,

there's state laws. And so what we see is states and groups of states, but also individuals and class

action lawsuits going to court to try to force these companies to either pay damages and

ideally with their aiming force to change their practices underneath. There is however a lag time

with all of these approaches. We're litigating the fallout of the social media revolution that

began a generation ago. It remains to be seen how quickly courts, individuals, governments will

tackle what we're seeing in the AI revolution. There are already a wave of lawsuits about AI chat

bots. And so that is just starting to work its way through the courts. That was journal tech reporter

Sam Shekner in Paris. Sam, thanks as always. Thanks for having me. As Sam mentioned, a jury is

currently deliberating a similar case in Los Angeles in addition to more than 2,000 lawsuits pending

in federal court. Meta spokesman said the company disagrees with the verdict in New Mexico and

plans to appeal. As part of yesterday's verdict, Meta was ordered to pay $375 million in civil

penalties. It made 160 times that amount of revenue in the most recent quarter.

And if Meta has its way, it could be making substantially more money in the next five years.

The company is rolling out a new stock incentive program for Top execs that could see some earn

hundreds of millions of dollars if its market cap tops more than $9 trillion by 2031. A massive leap

from its current one and a half trillion. Meta has leaned heavily on stock awards amid the AI race

with a journal analysis finding that cash costs tied directly to those awards consumed 96% of its

free cash flow last year. Shares in British semiconductor designer Arm Holdings have sort off

hours after it announced plans to sell its own chips for the first time, putting it into direct

competition with longtime customers like Invidia and Alphabet. The new chip has been developed

with Meta for use in data centers with open AI, SAP, and CloudFair also signing on as customers.

Arm designs power nearly every smartphone in tablet. Meanwhile, South Korean chip giant SK

Heinex is Iron Wall Street. The company plans to list in the US later this year, looking to tap

into global cash to fuel its high-end AI chip production. The exact size and timing of the listing

is still under wraps with SK Heinex saying it will make a final decision on whether to list

after the SEC's review and considering market conditions.

And I can't believe I'm saying this, but the maker of a toothy elf named Labubu has seen its

profits quadruple to nearly $2 billion after the toy became a global status symbol. China's

pop mart specializes in so-called blind boxes of collectible toys where you don't know which

character is inside until you open it. Labubu, let's think of Labubu on boxing. I really want

the loved ones. This must be the world's biggest blind box. I'm actually surprised I had these in

stock. This is the most exciting day of my life. My best friend Brooks sent me a labubu because she's

some- Well, despite massive sales growth, investors appear worried that the company won't be able to

keep up the momentum with its stock tumbling more than 20 percent this morning.

Coming up, a federal judge appears to side with anthropic as it challenges the Pentagon's

labeling of it as a national security risk, and we'll get the latest on diplomatic efforts to

end the war in Iran. Those stories and more after the break.

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The U.S. has sent Iran a 15-point plan to end the war, which calls on Tehran to fully reopen

the Strait of Hormuz, along with a previous list of Trump administration demands.

Journal Middle East correspondent Benoit Fokhan has the details.

Iran should stop enriching Iran for its nuclear program and should dismantle its biggest

nuclear enrichment facilities. Iran should stop funding proxies and also reduce its missile

program. One thing that is a step up compared with the previous discussions is the fact that

there would be a complete lifting of sanctions. The oil embargo, the banking sanctions,

I mean, that's really blocking a lot of Iran's trade and making whatever remains of that trade

much more expensive and less profitable. So that's kind of the best thing that Iran could get out

of these negotiations. Mediators from Turkey, Egypt, and Pakistan are pushing to a range of

meeting between U.S. and Iranian officials tomorrow in the hopes of ending the war in the next

48 hours. But Benoit says that Gulf states are growing alarmed by Trump's eagerness to do a deal.

The U.S. is subject to push and pull pressure. So you have countries like Qatar,

whose liquefied natural gas exports have been interrupted by the conflict. So it's catastrophic

for them. But they are all the countries like Saudi Arabia and United Arab Emirates will feel

that you can't really have an end to the war if Iran is not weakened militarily.

They don't want Iran to be able to attack his neighbors. So they want Iran disabled and they

want the straight of them is reopened. Otherwise they feel like he's going to really be a negotiation

that effectively re-empower Iran and the inability to attack again. The Pentagon is also planning

to deploy around 3,000 American soldiers to the Middle East to support operations against Iran.

The official caution that a decision to put boots on the ground in Iran hasn't been made.

The federal judge in California has said the U.S. government's move to ban and

THROPPIC appeared to be a punishment for making its contract dispute with the Pentagon public.

U.S. District Judge Rita Lynn said that would be a violation of the First Amendment

and that the Trump administration's actions didn't align with its stated national security concerns.

And THROPPIC sued the U.S. government to halt its designation as a supply chain risk

after the company took issue with the potential of its models being used for mass domestic

surveillance and autonomous weapons. Lynn asked for more evidence before making her decision on

THROPPIC's request for an injunction. And U.S. lawmakers are expanding their scrutiny of private

equity to include its influence over child care. Yesterday, Oregon Democratic Senator Jeff

Markley announced an investigation into whether two firms are putting their own profits ahead of

the safety and welfare of children at the facilities they control. Swiss firm Partners Group

declined to comment and New York-based American securities didn't reply to a request for comment.

Federal lawmakers recently introduced bills aimed at curving private equity's influence

in a range of industries, including healthcare and housing.

And finally, for years, a thirst for fine wine in China has been a boon for the world's top

growing regions with producers in California, Australia, and France in particular cashing in.

Even as there were fewer drinkers in many other parts of the world,

Chinese people were getting wealthier, they were drinking more wine, and it looked very promising.

You know, wine sales were just booming. That's the journal's John Emont. He says that in 2018,

about $3 billion of foreign wine was brought into China. But the last year, that fell by about half,

in part because of a souring economy. But another major factor was Xi Jinping's crackdown on so-called

unbecoming behavior by Communist Party officials, who apparently were too often becoming uncorked

at government events. This has been really tough for wine makers in places like

Wardo and Australia, where the industries came to a great degree reliant on Chinese buyers.

Both of these regions, for different reasons, were particularly favored by Chinese wine buyers and

began really catering to Chinese tastes. And now that demand has really evaporated in China,

it's been quite tough for growers in these regions. So we're seeing

winemakers having to pull up vines in both countries and just leave fruit to rot.

Australia's treasury wine estates, one of the world's largest wine companies, recently said that

wine valued at about $150 million was just sitting in warehouses in China, while European

drinks giants Perno Ricard and Diagio reported double-digit drops in China sales.

Yeah, that's it for what's news for this Wednesday morning. Today's show was produced by Daniel

Bach and Honey Moir, our supervising producer, is Sandra Kelhoff, and I'm Luke Vargas with the

Wall Street Journal. We will be back tonight with a new show. And until then, thanks for listening.

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