Meta says US states are seeking $1.81 trillion in penalties in August youth safety trial

Meta Platforms said in a court filing on July 6 that four states were seeking US$1.4 trillion (S$1.81 trillion) in penalties over accusations the company designed its Facebook and Instagram platforms to addict young users and misled the public about their safety.

Meta put forward the figure in its response to the attorneys general’s filings on how penalties should be calculated if the states prevailed at trial.

The number, which has not previously been disclosed and is close to Meta’s market capitalisation of around US$1.5 trillion, comes ahead of an August trial in Oakland, California, over the claims brought by California, Colorado, Kentucky and New Jersey against the company.

Meta said the amount was unsupported by the evidence.

“A sanction of that size has no analogue in the history of consumer protection enforcement,” the company said in the filing.

“The plaintiffs’ outlandish calculations have no basis in fact or law,” the company said in a statement, adding that it would continue to defend itself against the states’ demands.

A spokesperson for California Attorney-General Rob Bonta said in a statement the lawsuit “alleges Meta has prioritised profits over the safety of kids and fuelled the mental health crisis we see impacting a generation of American children. The California Department of Justice looks forward to holding Meta fully accountable at trial in August”.

Spokespeople for the attorneys-general offices in Colorado and New Jersey declined to comment. Representatives for the Kentucky Attorney-General’s office did not respond to requests for comment after the filing.

Tallying damages

The states’ filings are sealed, but at a court hearing in June they said they were calculating the penalties by multiplying the number of violations by fine amounts set by state law.

The number of violations is based on the estimated number of teens and young users affected by Meta’s actions, the states said.

Twenty-nine states have sued Meta in federal court, most of them alleging the company violated the federal Children’s Online Privacy Protection Act by collecting data from children without proper parental consent.

The trial in August before US District Judge Yvonne Gonzalez Rogers will address all claims brought under that law, plus the four states’ allegations that the company violated their state laws protecting consumers by misleading them about the safety of their platforms.

Meta has denied the allegations, saying the attorneys-general have no ‌evidence it ⁠misled consumers about its platforms’ alleged addictiveness because “social media addiction” is not an established psychiatric condition, and therefore statements that its platforms were not addictive could not be false.

A further 14 states have brought claims under their own laws, which will be heard at a separate trial in February.

In June, Rogers rejected Meta’s bid to cancel the trial, saying there remained factual disputes over whether its social media platforms were addictive, whether ​Meta falsely denied it designed them that way, and whether it “partially” directed the platforms ​at children.

Meta, Snapchat and that platform’s parent Snap, YouTube and its parent Alphabet, and TikTok and its parent ByteDance face thousands of lawsuits in federal and state court over claims they knowingly designed their platforms to have features that addict children and teens, fuelling a mental health crisis.

States across the country have sued the companies, some as part of the case before Rogers and others in their home state courts.

New Mexico was the first to go to trial, and a jury awarded the state US$375 million in March after finding the company had misled New Mexico consumers.

A judge in New Mexico is currently weighing the second portion of the state’s case, which seeks additional damages and a court order directing the company to make changes to its Instagram, Facebook and WhatsApp platforms. REUTERS