Meta, Facebook’s parent company, could be on the hook for $1.4 trillion in penalties. The astronomical sum is the potential damage from an ongoing trial against the company over allegations from several US states that Meta designed its platform to be addictive to young users.
California, Colorado, Kentucky and New Jersey are leading the charge with the trial itself being held in Oakland, California in front of US District Judge Yvonne Gonzalez Rogers. The states’ filings are kept under wraps for now, but a hearing that took place in June revealed some details.
The $1.4 trillion is the result of a simple calculation – multiplying the number of violations by the fines set by each state. The number of violations is an estimate of the number of young people that were affected by Meta’s allegedly malicious design. The states are alleging that Meta misled its consumers about the safety of its platform.
Meta denies these claims, saying that “social media addiction” is not a recognized psychiatric condition. However, Judge Rogers denied a bid to cancel the trial last month. The Judge said that it is yet to be determined whether Meta’s platforms are addictive, whether the company falsely denied allegations that they were designed to be that way and whether they are directed at young users.
“A sanction of that size has no analog in the history of consumer protection enforcement,” states Meta in a court filing. Meta currently has a market cap of $1.52 trillion, just north of the potential penalty.
All of this is part of a larger legal battle – a trial in New Mexico already awarded the state $375 million this March after the court found that Meta did indeed mislead its consumers. That trial is still ongoing as New Mexico is seeking additional damages and to compel Meta to change Facebook, as well as Instagram and WhatsApp.
There is another case – 29 states are suing Meta in federal court over alleged violations of the Children’s Online Privacy Protection Act (also known as COPPA).
