The penalty demand, close to Meta's entire market value, comes before an August trial over claims Facebook and Instagram were built to addict minors
Bloomberg / Getty Images
Meta $META said in a court filing Monday that four states are seeking $1.4 trillion in penalties over allegations the company designed Facebook and Instagram to addict young users and misled the public about platform safety, according to Reuters. The figure is close to Meta's market capitalization of roughly $1.5 trillion.
Though California, Colorado, Kentucky, and New Jersey have kept their own filings sealed, a June court hearing offered a glimpse into their methodology: The states described multiplying a per-violation fine amount established by state law against a headcount of the teens and young users they contend were harmed by Meta's conduct.
Meta called the demand unsupported by the evidence. "A sanction of that size has no analog in the history of consumer protection enforcement," the company said in the filing, according to Reuters.
The disclosure comes ahead of an August trial before U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California. On one track, all 29 states pressing federal claims will have those arguments heard — specifically, allegations tied to the Children's Online Privacy Protection Act, the federal statute that bars platforms from gathering data on minors without parental authorization. Running alongside those claims are the four states' additional accusations that Meta deceived consumers under their respective state consumer protection statutes. An additional 14 states pursuing claims grounded in their individual state laws are set to have those arguments adjudicated at a second trial scheduled for February.
The presiding judge turned down Meta's attempt to scuttle the August proceedings last month, concluding that unresolved questions of fact persisted — among them whether addictive design was intentional, whether Meta made false assurances about it, and whether the company had at least partly aimed its platforms at a younger audience.
The company rejects the core accusations, contending that claims of consumer deception around addictiveness fall apart given that the psychiatric community does not formally recognize social media addiction as a condition — which, in Meta's view, means its statements on the subject cannot constitute a lie.
The August trial is one front in a broad wave of litigation targeting Meta over youth safety. A jury in New Mexico found Meta liable for $375 million in damages earlier this year, concluding the company violated state consumer protection law by exposing children to sexual exploitation and concealing platform dangers. The New Mexico litigation is not finished: the same judge is now considering a follow-on phase that asks for further monetary damages and a court-ordered overhaul of how Facebook, Instagram, and WhatsApp operate.
Meta also settled the first U.S. school district case to go to trial over mental health costs attributed to social media platforms, and a Los Angeles judge denied Meta and Alphabet $GOOGL's Google motions for a new trial in a separate addiction case that resulted in a $6 million damages award.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.
