Meta faces trial over child safety, potential $1.4 trillion damages sought

Meta Platforms is on trial this week in California, facing a lawsuit that could fundamentally alter its operations of Facebook and Instagram and potentially cost it trillions of dollars. The lawsuit, filed by dozens of states three years ago, accuses the social media giant of knowingly designing features that addict children and violate federal law by collecting data on those under 13 without parental consent.

“

Meta has harnessed powerful and unprecedented technologies to entice, engage, and ultimately ensnare youth and teens. Its motive is profit, and in seeking to maximise its financial gains.

"Meta has harnessed powerful and unprecedented technologies to entice, engage, and ultimately ensnare youth and teens. Its motive is profit, and in seeking to maximise its financial gains," the lawsuit states. The states are seeking extensive financial damages, which Meta disclosed in a legal filing could theoretically reach $1.4 trillion, a figure nearly equivalent to the company's entire market capitalization.

“

We’ve listened to parents, worked with experts and law enforcement, and conducted in-depth research to understand the issues that matter most.

The trial begins with four states as plaintiffs: California, Colorado, Kentucky, and New Jersey. The remaining 25 states are expected to have separate trials later. Meta has stated it disputes the allegations and plans to demonstrate its commitment to supporting young people. "We’ve listened to parents, worked with experts and law enforcement, and conducted in-depth research to understand the issues that matter most," the company said in a statement.

“

It’s not plausible in the sense that Meta doesn’t have that much money and could not get it.

This trial is particularly consequential for Meta, which has already lost two significant legal cases concerning harms to children and teens this year. The company recently reported a profit decline, partly attributed to $2.4 billion in legal expenses. While the $1.4 trillion figure is considered by legal experts to be an unlikely outcome due to Meta's financial capacity, the court would have broad discretion over any penalty. "An award that large would put Meta into bankruptcy, wipe out its owners, and effectively result in the states owning Meta," said James Grimmelmann, a law professor at Cornell Law School and Cornell Tech, adding that such an outcome is "extremely unlikely."

“

An award that large would put Meta into bankruptcy, wipe out its owners, and effectively result in the states owning Meta.