Meta faces a federal trial in California beginning Tuesday, where 29 state attorneys general accuse the company of designing Instagram and Facebook to be addictive to children and breaking child-privacy laws.
The states seek roughly $200 billion in penalties, though Meta claims they are seeking $1.4 trillion.
A loss could force Meta to overhaul the recommendation algorithms that power engagement and advertising revenue.
What happened
Opening arguments begin Tuesday in a federal trial where 29 state attorneys general, co-led by California AG Rob Bonta, accuse Meta of designing Instagram and Facebook to be addictive to children and violating child-privacy laws. Meta claims the states are seeking $1.4 trillion in penalties; the states say the figure is closer to $200 billion.
Why it matters
Unlike prior state-level suits, this trial unfolds in Meta's backyard and a loss could force the company to rework the recommendation algorithms that drive engagement and ad revenue. New Mexico AG Raúl Torrez, who won a separate case against Meta resulting in nearly $1 billion in damages, told CNBC the outcome "could be astronomical."
What to watch
The trial is unfolding in California federal court with opening arguments beginning Tuesday. The outcome may require Meta to fundamentally alter how its platforms operate.
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Meta is entering what may be its most consequential legal challenge to date. The trial consolidates enforcement action by 29 states rather than isolated regional suits, amplifying both pressure and stakes. New Mexico's separate victory against Meta—which yielded nearly $1 billion in damages—signals that state attorneys general have traction against the company on child-protection grounds. The penalty range reflects deep disagreement: Meta's characterization of $1.4 trillion suggests the states are demanding damages the company deems extreme, while the states' counter that $200 billion is the true ask signals a still-massive exposure. The threat to Meta's core business model is tangible. The company's recommendation algorithms are engineered to maximize user engagement and, by extension, ad impressions and revenue. A court order to materially alter those systems could reshape how Instagram and Facebook operate, directly threatening the engagement metrics that underpin Meta's advertising model.
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