State attorneys general and Meta Platforms are currently in discussions about a potential settlement in a lawsuit accusing the company of intentionally designing Facebook and Instagram to hook teenagers. The trial, now in its second week in federal court in Oakland, California, involves attorneys general from 29 states seeking monetary penalties and changes to how Meta operates its platforms. Sources close to the discussions have revealed that both parties are exploring the possibility of reaching a settlement before the trial concludes.
According to Bloomberg, Meta’s internal estimates suggest that the maximum penalty exposure from an unfavorable verdict could reach around $1.4 trillion, a figure close to the company’s total market capitalization. A settlement, if reached, would likely involve a significantly lower sum. The heart of the states’ case revolves around alleged violations of state consumer protection laws and the federal Children’s Online Privacy Protection Act. The attorneys general claim that Meta’s actions have resulted in significant harm to underage users, with potential fines escalating due to the large number of minors using the platforms without parental consent.
Meta has vehemently denied the allegations, with the company rejecting the states’ claims and criticizing the demands made by the attorneys general as unreasonable. In the ongoing trial, Instagram chief Adam Mosseri and several current and former Meta employees have provided testimony regarding the design of the platforms and their impact on teenagers. It is anticipated that Meta’s founder and CEO, Mark Zuckerberg, will also testify in the trial.
The trial, part of a larger group of over 3,000 federal lawsuits against Meta and other social media companies, is being overseen by U.S. District Judge Yvonne Gonzalez Rogers. California Deputy Attorney General Megan O’Neill has described Meta’s business model to the jury as one focused on engaging users, collecting data, and concealing the truth from the public. Meta has countered these claims by emphasizing its efforts to protect minors online.
The case, officially known as People of the State of California v. Meta Platforms Inc., is being closely watched as it unfolds in the U.S. District Court for the Northern District of California in Oakland. As discussions around a potential settlement continue, the outcome of the trial could have far-reaching implications for how social media platforms interact with underage users and handle data privacy issues.
