Mark Zuckerberg’s biggest legal nightmare yet could cost Meta $1.4 trillion

Meta Platforms could face an unprecedented $1.4 trillion in penalties after four states accused the tech giant of deliberately designing Facebook and Instagram to addict young users while misleading the public about the platforms’ safety.

The eye-watering figure was disclosed by Meta itself in a recent court filing responding to attorneys general’s proposed penalty calculations. The total is close to the company’s roughly $1.5 trillion market value.

The disclosure comes ahead of a pivotal trial beginning in August in Oakland, California. California, Colorado, Kentucky and New Jersey allege Meta violated state consumer protection laws by creating addictive products for children and teens.

Meta denies the allegations, calling the proposed penalty “unsupported by the evidence.”

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

Although the states’ filings remain under seal, hearings in June revealed they calculated the potential penalties by multiplying the number of alleged violations by fines allowed under state law. The alleged violations are based on the estimated number of children and teenagers affected.

The August trial before U.S. District Judge Yvonne Gonzalez Rogers will also consider claims brought by 29 states accusing Meta of violating the federal Children’s Online Privacy Protection Act by collecting children’s data without proper parental consent.

Meta has argued that “social media addiction” is not an established psychiatric diagnosis and therefore its statements denying its platforms are addictive could not have been false.

The company faces additional legal battles beyond the August trial. Fourteen more states are pursuing similar claims under their own laws, with a separate trial scheduled for February.

Last month, Judge Rogers rejected Meta’s request to delay the August proceedings, ruling there are unresolved factual disputes over whether its platforms are addictive, whether the company falsely denied designing them that way, and whether Meta intentionally targeted children.

Following that ruling, California Attorney General Rob Bonta accused Meta of putting profits ahead of children’s safety and pledged to hold the company “fully accountable” for its alleged role in the youth mental health crisis.

Meta is one of several social media companies facing mounting legal pressure. Snap, Alphabet-owned YouTube and ByteDance-owned TikTok are also battling thousands of lawsuits alleging they intentionally designed their platforms to keep children and teenagers hooked, contributing to widespread mental health problems.

New Mexico became the first state to take such claims to trial, winning a $375 million jury verdict in March after jurors found the company had misled consumers. A judge is now considering whether to award additional damages and order changes to Instagram, Facebook and WhatsApp.