Meta opened a historic federal trial in Oakland, California, on Tuesday, with four states—California, Colorado, Kentucky, and New Jersey—accusing the company of knowingly designing addictive features into Facebook and Instagram that harm children and collecting data on users under 13 without parental consent. The states are part of a broader coalition of 29 states that sued Meta in 2023, and they are seeking damages that could theoretically reach $1.4 trillion, though the four states have reportedly said they will seek penalties approaching $200 billion for consumer protection violations, according to court filings.
Mark Zuckerberg is expected to testify during the six-to-eight-week trial, with a verdict anticipated by October. Former Meta employee Arturo Bejar is also set to testify as an expert witness about internal safety practices. Kentucky Attorney General Russell Coleman called the case "the largest consumer protection lawsuit in American history." Judge Yvonne Gonzalez Rogers will make the final ruling, with an eight-person advisory jury seated.
Meta shares fell about 3% on Tuesday, adding to a year-to-date decline of roughly 16%, as investors weighed the legal risks alongside higher oil prices, rising Treasury yields, and concerns about the company's heavy spending on AI infrastructure. Meta has denied the allegations, saying its record of protecting teenagers is strong and accusing the states of chasing an "outlandish payout." The company also noted it incurred $2.4 billion in legal fees in its latest quarter. The trial follows earlier legal setbacks, including a New Mexico ruling this year that Meta knowingly harmed children's mental health and ordered close to $1 billion in damages.
