Meta revealed in a court filing Monday that state attorneys general (AGs) are seeking up to $1.4 trillion in penalties ahead of an August trial over claims that the company knowingly designed Facebook and Instagram to be addictive to teen users. The staggering figure represents the large share of Meta’s total market capitalization, currently listed at $1.48 trillion.
The lawsuit In re Social Media Adolescent Addiction/Personal Injury Product Liability Litigation is a multi district litigation consolidated in the Northern District of California. More than 40 state AGs have brought claims against Meta and other social media platforms, arguing that the companies knowingly built addictive features into their products and misled the public about risks posed to young users. In May, Meta reached its first settlement as part of this consolidated litigation, agreeing to pay a Kentucky school district $9 million as part of a broader $27 million deal, reportedly split among Meta and three other companies named in the suit. A trial scheduled for August will hear consumer protection claims brought by California, Colorado, Kentucky, and New Jersey, along with federal claims brought by 29 states under the Children’s Online Privacy Protection Rule (COPPA).
Meta’s Monday filing notes that the plaintiffs seek $1.4 trillion in civil penalties and disgorgement. This large figure reflects the method used to quantify consumer protection violations, wherein penalties are often calculated on a per-violation basis, applied to tens of millions of users in this instance. Meta pushed back against the $1.4 trillion figure on Monday, arguing that civil penalties under each state’s consumer protection law have to be tied to a “separate, affirmative act” of wrongdoing. Meta argues that the AGs calculated their numbers by multiplying every qualifying teen user by the maximum fine permitted under each applicable law, regardless of whether those specific users were ever exposed to features at issue in the litigation. Meta also argues that the states’ proposed remedies double-count users and apply penalties which are contradicted by the states’ own expert witness reports.
Meta further raises constitutional concerns, pointing to precedent holding that penalties which are “wholly disproportionate” to the underlying offense are “substantively improper under the Due Process Clause.” The company notes that no case involving unfair practices or COPPA violations has ever approached a $1 trillion penalty, emphasizing that the 2006 landmark Master Settlement Agreement tobacco lawsuit involved a total payment of only $206 billion. Meta asks the court to strike several of the AG’s penalty calculations before trial, rule that the court will decide monetary relief in place of the advisory jury, and prohibit any mention of specific dollar figures to the jury during the liability phase of the trial.
Meta continues to face scrutiny and litigation domestically and internationally. In March, a California jury found Meta and Youtube liable for negligence in having knowingly designed addictive and harmful products and a jury in New Mexico found Meta liable for harming children and misleading consumers about the safety of its platforms. Last December, Austria’s Supreme Court ruled that Meta’s personalized advertising model violates European Union data protection standards.
