(TNND) — State attorneys general are seeking $1.4 trillion in penalties if they win in court against Meta, which they’ve accused of designing harmful social media features to hook kids.
A Meta spokesperson called the request “outlandish” with “no basis in fact or law.”
“We’ll continue to defend ourselves against headline-seeking demands that are untethered from reality,” said the spokesperson via email Tuesday.
A day earlier, Meta slapped back at the $1.4 trillion in a court filing, saying a penalty that big “has no analog in the history of consumer protection enforcement.”
The figure, which compares to Meta’s market cap of about $1.57 trillion, stems from a landmark civil trial set for next month in Oakland, California.
California Attorney General Rob Bonta and a coalition of state attorneys general filed a federal lawsuit alleging that Meta, the company behind Facebook and Instagram, deployed harmful features that addict children and teens to their mental and physical detriment.
Meta said the case is about three narrow issues: alleged misrepresentations over platform safety, a few specific design features, and Children’s Online Privacy Protection Act violations.
The $1.4 trillion comes from what California, Colorado, Kentucky and New Jersey say Meta should be forced to pay if it’s found liable for consumer protection and COPPA violations in their states.
Meanwhile, a couple of dozen other states also have claims of COPPA violations pending in the big, consolidated lawsuit against Meta. Alleged COPPA violations involve data collection from minors.
“One of my most important jobs as Attorney General is to protect our children from harm. As our lawsuit alleges, Meta is prioritizing profits over the safety of children and violating consumer protection laws left and right,” Bonta said in a recent news release.
Meta said a $1.4 trillion remedy wouldn’t match the actual claims being made by the attorneys general. And the company said the calculation was flawed, counting the same teens that were allegedly victimized multiple times to pump up the penalty figure.
Clay Calvert, a nonresident senior fellow in technology policy studies at the American Enterprise Institute, said the $1.4 trillion penalty figure “seems exorbitant.”
“And obviously the attorneys general from the states are going to reach for as much money as they can,” said Calvert, who is also a professor of law emeritus at the University of Florida. “I think they feel that the wind is behind them right now.”
Calvert said this multidistrict litigation is “momentous” for the future of social media platforms.
And he said it’s going to trial on the heels of other “landmark” cases in which an individual, a state and a school district all won big jury verdicts or settlements against Meta.
A New Mexico jury found Meta liable earlier this year for misleading consumers about the safety of its platforms and endangering children, ordering the company to pay $375 million in civil penalties.
A California jury awarded millions to an individual plaintiff, a 20-year-old woman, who said her use of social media as a child addicted her to the technology and amplified her struggles with mental health.
And a Kentucky school district settled with Meta over costs it says it incurred addressing the effects of social media on students’ mental health.
Meta isn’t the only social media company facing a litany of lawsuits in both state and federal courts.
Calvert said the state attorneys general see momentum in their favor, so they seem to be going big in the consolidated case playing out in the Northern District of California before Chief District Judge Yvonne Gonzalez Rogers.
Eric Goldman, a law professor at Santa Clara University and the co-director of the Datta Center for High Tech Law, said that applying statutory damages on such a massive scale could have consequences far beyond compensating victims, potentially threatening an entire industry on which many people rely.
He questioned if the cases were appropriate for the attorneys general to be pursuing, noting that many of the claims centered on “pretty vague” and “really manipulable” claims that the platforms misled the public about their safety for young users.
“Now, once we figure out exactly what the (attorneys general) are claiming, then they should go where the evidence goes,” Goldman said. “If, in fact, there’s been a violation and it meets the statutory standards for damages, they should claim them all. That’s their job. But it could lead to a mind-bending result where the standard application of something like statutory damages could knock out an entire industry that many people rely upon and many people derive significant benefits from. So, the damages in isolation might be what the legislators have specified, and yet the effect of that damages assertion might completely change our society in a way that people may actually have issues with.”
Legislators, not courts, need to resolve some of these complicated issues, Goldman said.
Calvert said Meta doesn’t want the trial to become a broad referendum on social media addiction and teen mental health.
He also said taking the case to trial might be a risky move for Meta, given recent verdicts and public sentiment. A settlement might be in the cards, though for nowhere near the $1.4 trillion figure, he said.
Goldman said the dollar amounts involved in the various lawsuits against social media companies are so big that he sees the litigation as “an existential threat to the social media industry.”
He said the social media companies are fighting legal battles on multiple fronts that could fundamentally reshape the industry.
And Goldman said he sees the same thing beginning to play out around generative artificial intelligence, video games, and social gaming.
Calvert said he doesn’t expect the lawsuits to put Meta or other social media companies out of business, but he believes large judgments or settlements could pressure the companies to redesign their platforms to avoid liability.
Despite the acknowledged concerns of social media, both men said the platforms also offer benefits to a lot of people, including teens.
“They’re not all evil as they’re being portrayed in a lot of coverage,” Calvert said, noting benefits such as self-expression and civic engagement.
If the case brought by the states isn’t settled, both Goldman and Calvert said it could take years to play out, with either side that loses sure to appeal.
