Meta is facing a major legal challenge in California as state attorneys general prepare to argue that Facebook and Instagram were designed in ways that encouraged addictive behavior among children and teenagers.
The trial, which begins in Oakland’s federal courthouse, follows a lawsuit brought by a coalition of 29 state attorneys general. California, Colorado, New Jersey and Kentucky are leading the case, which could result in significant financial penalties and potentially force major changes to Meta’s products.
California case could have major impact on Meta
The lawsuit alleges that Meta violated federal and state laws, including the Children’s Online Privacy Protection Act (COPPA) and consumer protection regulations, by allegedly misleading users about the safety of its platforms.
Industry experts have compared the case to a potential “Big Tobacco” moment for social media companies, referring to the legal battles that resulted in major financial penalties and reduced influence for tobacco companies after decades of public health concerns.
The trial follows a recent New Mexico ruling that required Meta to pay nearly $1 billion and make changes related to child safety practices. However, experts say a negative outcome in California could have much broader consequences because of the state’s size and influence.
Potential financial impact on Meta
New Mexico Attorney General Raúl Torrez said the California case could create significant pressure on Meta, which generates approximately 98% of its revenue from online advertising.
The company relies on advertising revenue to support major investments in artificial intelligence infrastructure, with Meta planning to spend billions of dollars expanding its AI capabilities.
Meta has rejected the allegations, saying the claims are unsupported and that financial demands from state officials are disproportionate.
States seek changes to Facebook and Instagram design
The legal strategy focuses on Meta’s alleged product design choices rather than only user-generated content, allowing states to avoid protections provided by Section 230 of the Communications Decency Act.
In New Mexico, proposed remedies included improving age verification systems, developing tools to identify users under 13 and creating easier reporting methods for suspected underage accounts.
California and other states are seeking broader changes, including restrictions on features they describe as addictive design elements, such as:
- Infinite scrolling
- Autoplay features
- Ephemeral content
- Beauty filters
- Engagement-focused recommendation algorithms
Meta argues claims are exaggerated
Meta has argued that the states have not proven that users were misled or harmed and that some complaints target features common across the entire social media industry.
The company’s legal team has warned that potential damages in the consolidated state case could reach extremely high levels, while attorneys representing the states have suggested a figure of around $200 billion may be more realistic.
Possible product changes could be the biggest concern
Legal experts say the financial penalties may not be the only major consequence for Meta. A court order requiring changes to Facebook and Instagram’s design could significantly affect how the platforms operate.
Unlike private lawsuits, government actions have the ability to seek broader remedies that could force companies to modify business practices, recommendation systems and product features.
The states are also seeking nationwide restrictions related to COPPA violations, including deletion of personal data from children under 13 and removal of algorithms trained using that information.
Meta faces wider social media scrutiny
The California trial is part of a broader wave of legal challenges facing major technology companies, including Meta, YouTube, TikTok and Snapchat, over alleged impacts on youth mental health and online safety.
While Meta’s stock performance has mainly been affected by concerns over AI spending and infrastructure costs, officials argue investors may be underestimating the potential impact of a major California ruling.
