Zuckerberg's Most Expensive Lawsuit Begins: Four U.S. States Seek $1.4 Trillion, Accusing Facebook and Instagram of Harming Teenagers.

Four states - California, Colorado, Kentucky, and New Jersey - have demanded up to $1.4 trillion from Meta, an amount approaching the company's nearly $1.5 trillion market cap.
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• How is $1.4 trillion calculated?
• Meta denies, argues; judge not convinced
• Not just Meta: The entire social media industry is ablaze

Lawsuit threatening the very foundation of the company? Zuckerberg is facing what may be the most expensive landmine since he started the company. The compensation amount demanded jointly by four states in court documents approaches the entire market value of Meta.

This Monday: Meta filed documents with the court responding to the compensation claims from the attorneys general of California, Colorado, Kentucky, and New Jersey, totaling $1.4 trillion, close to Meta's current market cap of about $1.5 trillion. Meta stated in the documents: "Sanctions of this magnitude have no precedent in the history of consumer protection enforcement."

How is $1.4 trillion calculated?

The documents from the four states are still sealed, but a hearing in June revealed the calculation logic: first estimate the number of affected children and adolescents, then multiply by "number of violations × fine amount allowed by state law," stacking up to astronomical figures.

The core accusation from the four states is: Meta violated state consumer protection laws by deliberately designing Facebook and Instagram to be addictive for teenagers, while concealing the platform's security risks from the public.

The trial is scheduled for August in Oakland, California, presided over by U.S. District Judge Yvonne Gonzalez Rogers. The same trial also incorporates accusations from 29 other states, claiming that Meta violated the federal Children's Online Privacy Protection Act (COPPA) by collecting children's data without proper parental consent.

Meta denies, argues; judge not convinced

In response, Meta completely denies the allegations, saying the states' fine proposals are "inconsistent with the evidence." The company also raised a technical defense in court filings: "social media addiction" is not an established psychiatric diagnosis, so Meta's denial that the platform is addictive cannot constitute a false statement.

However, this argument failed to convince the judge last month. Judge Rogers rejected Meta's request to postpone the August trial, ruling that key factual disputes such as "whether the platform is addictive," "whether Meta falsely denied designing it that way," and "whether Meta deliberately targeted children" remain unresolved and cannot be dismissed.

After the ruling, California Attorney General Rob Bonta immediately attacked, accusing Meta of putting profits above children's safety, vowing to hold the company "fully accountable" for its role in the youth mental health crisis.

Not just Meta: The entire social media industry is ablaze

Notably, Meta is by no means the only social media giant being sued. Snap, Alphabet's YouTube, and ByteDance's TikTok are also facing thousands of lawsuits, accused of deliberately designing their platforms to be addictive for children and adolescents, leading to widespread mental health issues.

New Mexico was the first state to actually bring such accusations to court, winning a $375 million jury verdict in March. The jury found Meta misled consumers. The judge is still considering whether to award additional damages and has ordered Meta to make substantial changes to Instagram, Facebook, and WhatsApp.

In light of this precedent, the outcome of the August trial in Oakland could set a new ceiling for compensation amounts in a series of subsequent lawsuits.