Meta says four states are seeking record financial penalties
Meta Platforms (NASDAQ:META) said in a court filing on Monday that four US states are pursuing penalties totalling approximately US$1.4 trillion in a lawsuit alleging the company deliberately designed Facebook and Instagram to encourage addictive use among young people while misleading the public about platform safety.
The figure was disclosed in Meta’s response to court filings submitted by the state attorneys general outlining how damages should be calculated if they succeed at trial.
The potential penalty, which is close to Meta’s market value of roughly US$1.5 trillion, comes ahead of a trial scheduled for August in Oakland, California involving claims brought by California, Colorado, Kentucky and New Jersey.
Meta argued the proposed damages have no factual basis.
“A sanction of that size has no analog in the history of consumer protection enforcement,” the company said in the filing.
Representatives for the state attorneys general did not immediately comment following the filing.
States calculate penalties based on alleged violations
Although the states’ submissions remain under seal, prosecutors said during a June court hearing that they calculated the proposed penalties by multiplying the number of alleged violations by the maximum fines permitted under state law.
According to the states, the number of violations is based on estimates of how many teenagers and young users were affected by Meta’s conduct.
Meta rejects claims over platform addiction
Twenty-nine US states have filed lawsuits against Meta in federal court, with most alleging the company breached the Children’s Online Privacy Protection Act by collecting data from children without obtaining appropriate parental consent.
The August trial before US District Judge Yvonne Gonzalez Rogers will consider those federal claims alongside accusations from California, Colorado, Kentucky and New Jersey that Meta violated state consumer protection laws by misleading users about the safety of its social media platforms.
Meta has denied all allegations, arguing there is no evidence it deceived consumers because “social media addiction” is not a recognised psychiatric diagnosis. The company maintains that statements denying its platforms are addictive therefore cannot be considered false.
An additional 14 states have brought separate claims under their own laws, which are due to be heard in a separate trial next February.
Court allows case to proceed
Last month, Judge Gonzalez Rogers rejected Meta’s request to dismiss the case, ruling that significant factual disputes remain over whether the company’s platforms were intentionally designed to be addictive, whether Meta falsely denied those practices and whether it “partially” targeted children.
Following that ruling, California Attorney General Rob Bonta accused Meta of prioritising profits over children’s wellbeing and violating consumer protection laws, saying the state intends to hold the company “fully accountable” for its alleged role in the youth mental health crisis.
Meta is one of several technology companies facing extensive litigation over youth safety, alongside Snapchat and parent company Snap Inc., YouTube and parent Alphabet Inc., and TikTok together with parent ByteDance.
The lawsuits allege the companies knowingly developed platform features designed to keep children and teenagers engaged, contributing to worsening mental health outcomes.
Earlier this year, a jury in New Mexico awarded the state US$375 million after concluding Meta had misled consumers. A judge is now considering additional claims seeking further damages and court-ordered changes to Facebook, Instagram and WhatsApp.