Meta Face $1.4 Trillion Penalty Claim in US Youth Safety Trial

Meta Platforms has disclosed that four US states are seeking $1.4 trillion in penalties over allegations that the company designed its Facebook and Instagram platforms to encourage addiction among young users and misled the public about their safety.

The company revealed the figure in a court filing on Monday in response to submissions by state attorneys general on how potential penalties should be calculated if they succeed at trial.

The amount, which has not previously been made public and is close to Meta’s market capitalisation of about $1.5 trillion, comes ahead of an August trial in Oakland, California, involving claims brought by California, Colorado, Kentucky and New Jersey against the company.

Meta said the proposed penalty was unsupported by evidence.

“A sanction of that size has no parallel in the history of consumer protection enforcement,” the company said in its filing.

In a statement, Meta said the states’ calculations were “outlandish” and had “no basis in fact or law”, adding that it would continue to defend itself against the claims.

A spokesperson for California Attorney General Rob Bonta said the lawsuit alleges that Meta “prioritised profits over the safety of children” and contributed to a mental health crisis affecting a generation of young Americans. The California Department of Justice, the spokesperson added, looks forward to holding Meta accountable at trial.

Representatives for the attorneys general offices in Colorado and New Jersey declined to comment, while Kentucky officials did not respond to requests for comment following the filing.

Calculating Potential Damages

The states’ filings remain sealed, but during a court hearing in June they said penalties were being calculated by multiplying the number of alleged violations by fines set under state law. The states said the number of violations was based on estimates of the teenagers and young users affected by Meta’s actions.

Twenty-nine states have separately sued Meta in federal court, with most alleging that the company violated the federal Children’s Online Privacy Protection Act by collecting children’s data without proper parental consent.

The August trial before US District Judge Yvonne Gonzalez Rogers will address claims under that law, along with allegations from the four states that Meta violated consumer protection laws by misleading users about the safety of its platforms.

Meta has denied the allegations, arguing that the attorneys general have no evidence that it misled consumers about the alleged addictive nature of its platforms. The company said “social media addiction” is not an established psychiatric condition and that claims suggesting its platforms were not addictive could therefore not be considered false.

A further 14 states have brought claims under their own laws, which are scheduled to be heard in a separate trial in February.

Last month, Judge Rogers rejected Meta’s request to dismiss the trial, saying factual disputes remained over whether its platforms were addictive, whether the company falsely denied designing them that way, and whether it had specifically targeted children.

Meta, Snapchat owner Snap Inc., YouTube parent Alphabet and TikTok owner ByteDance are facing thousands of lawsuits in federal and state courts over allegations that they knowingly designed platforms with features that encourage excessive use among children and teenagers, contributing to a mental health crisis.

Several states have filed cases against the companies, with some included in the proceedings before Judge Rogers and others being pursued separately in state courts.

New Mexico was the first state to take its case to trial, with a jury awarding it $375 million in March after finding that Meta had misled consumers.

A judge in New Mexico is currently considering the second phase of the case, which seeks additional damages and a court order requiring changes to Instagram, Facebook and WhatsApp.

 

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