Mark Zuckerberg’s Meta faces the possibility of paying “astronomical” damages as opening arguments in the landmark trial accusing the tech giant of fueling a teen mental health crisis get underway in California federal court on Tuesday.
The Instagram parent claims it could face $1.4 trillion in damages – nearly the size of its entire market cap – based on how a coalition of state attorneys general argue that penalties should be calculated. The states say a more realistic figure if Meta loses the case would be a still-unprecedented $200 billion in damages.
Nonetheless, New Mexico attorney general Raul Torrez, who recently won a $567 million judgement against Meta in a separate state trial that made similar claims, said Wall Street is underestimating the possibility of an major court loss for Zuckerberg in his home state of California.
“You could wake up with a headline judgment that is, as I’ve said, astronomical,” Torrez told CNBC in an interview published Monday.
Meta is defending against a coalition of 29 state attorneys general who claim that Meta illegally collected and used kids’ data in a case first brought in 2023. The states further allege that Meta designed Facebook and Instagram to be addictive for teens through features such as the “like” button and recommendation algorithms, which caused a wave of anxiety, depression, self-harm and even suicide.
The AGs of California, Colorado, Kentucky and New Jersey also allege that Meta misled the public about safety risks associated with its apps.
“Meta designed a dangerous product for young users, knew it to be dangerous, and then lied to children, families, and the community about how dangerous it was,” California AG Rob Bonta said in a statement last week. “We are ready to hold Meta accountable for its role in fueling the mental health crisis of American children and look forward to trial. It seems Meta very much does not.”
While a jury will hear arguments and render an advisory verdict in the case, it will be up to District Judge Yvonne Gonzalez Rogers to make a final decision on specific damages and potential changes to how Meta does business.
Aside from financial penalties, the state AGs want to force Meta to delete any illegally harvested data from kids under age 13 and stop using algorithms trained on that data. They also want a court order barring Meta from using “certain addictive design feature” including infinite scroll and autoplay features.
Both Zuckerberg and Instagram chief Adam Mosseri could both be called to the witness stand.
Another likely key witness is Arturo Bejar, a former Meta safety researcher who delivered bombshell testimony accusing the company of exposing his teen daughter to “predators” during an appearance at the New Mexico trial in February.
Attorneys for Meta, which has strenuously denied wrongdoing, will argue that the state AGs are seeking damages that go far beyond the actual scope of their case – and that they have provided no evidence that the company’s apps cause real-world harm.
“The AGs offer no proof anyone in their states was misled, claim benign features like having an additional Instagram account somehow harmed their residents, and attempt to penalize Meta for industry-wide challenges like age verification,” a Meta spokesperson said in a statement.
“Rather than sticking to the facts or the law, the states have instead decided to chase an outlandish payout,” the spokesperson added. “We stand by our record of creating strong protections for teens, and look forward to making our case in court.”
The state AGs’ case in California federal court is just the latest legal battle in what critics have hailed as a “Big Tobacco” moment for the social media industry.
Aside from its loss in New Mexico, Meta and Google were ordered to pay a combined $6 million in damages after being held liable in California state court for fueling social media addiction for a 20-year-old woman known as “KGM.”
Meta and other social media firms face thousands of pending lawsuits across the country, with many of them concentrated in California’s state and federal courts.
With Post wires