Meta faces $1.4 trillion penalty demand in US youth addiction lawsuit

Meta is facing a potential $1.4 trillion in penalties from four US states—California, Colorado, Kentucky, and New Jersey—alleging that the company designed Facebook and Instagram to be addictive to young users and misled the public about the platforms' safety. The figure, disclosed in a court filing, is close to Meta's $1.5 trillion market capitalization Source: Gizmodo.

The allegations

The states claim Meta violated consumer protection laws by collecting data from children without parental consent and deploying addictive design features that caused mental health problems. The penalties were calculated by multiplying the estimated number of affected young users by fines set by state law Source: The Next Web. Meta has denied the allegations, arguing that social media addiction is not a recognized psychiatric condition and that the sum is "unprecedented" in consumer protection history Source: Fox Business.

Legal proceedings

US District Judge Yvonne Gonzalez Rogers rejected Meta's bid to dismiss the case, ruling that factual disputes remain over whether the platforms are addictive and whether Meta marketed them to children Source: Engadget. The trial is set for August 18 in Oakland, California. Additionally, 29 other states have filed separate lawsuits under federal child privacy law, and another 14 states have brought claims under their own laws, set for trial in 2027 Source: Gizmodo.

Previous rulings

A New Mexico jury awarded $375 million in March after finding Meta misled consumers, and a California jury returned a verdict in a similar addiction case earlier this year Source: Fox Business.