Financial penalty from the case could affect Meta CEO Mark Zuckerberg’s massive AI investments|Anthony Quintano|CC BY 2,0
Meta faces a potentially consequential trial in California today over allegations from four states that Instagram and Facebook are damaging children’s mental health.
The landmark trial could fundamentally change how users engage with the platforms and expose the company to potentially crippling financial losses.
In 2023, California, Colorado, Kentucky, and New Jersey sued the tech titan for up to $1.4 trillion, alleging Meta intentionally designed its social media platforms to hook young users on Instagram and Facebook through choices meant to maximize engagement.
The suit also claims the tech giant violated child privacy laws and misled the public about its products’ safety.
The states aren’t only pursuing potentially massive damages, which are close to the company’s $1.5 trillion market cap, they are also seeking sweeping reforms that could change social media forever.
The coalition wants the court to force the company to scrap features central to its platforms.
Demands include:
- Ending Instagram stories, image filters, infinite scroll, and video autoplay.
- The states also want Meta to change its “dopamine-manipulating recommendation algorithms” and prohibit kids from creating multiple accounts.
Meta has denied the claims and said it is committed to child safety.
The $1.4 trillion question
Meta probably won’t have to pay that much even if it loses. The judge overseeing the case has called the demand “unreasonable,” while saying the company’s $4 million estimate is also too low. The bigger threat could be a ruling that changes user behavior, dents ad revenue and triggers more lawsuits.
The California trial follows a legal setback in New Mexico this month, where Judge Bryan Biedscheid found the tech giant liable as a “public nuisance,” imposed a $942 million fine, and ordered restrictions on features used by minors.
Meanwhile, Mark Zuckerberg’s AI ambitions come with a hefty price tag, with spending potentially reaching $145 billion in 2026.