Meta in mid-trial settlement talks with 29 US states over teen addiction claims
Settlement discussions aim to avoid a potential $1.4 trillion penalty exposure as the federal trial enters its second week in Oakland.
Meta Platforms is holding discussions with the attorneys general of 29 US states regarding a potential settlement before the conclusion of a federal trial in Oakland, California. The lawsuit alleges that the company intentionally designed Facebook and Instagram to hook teenagers, with state officials seeking both monetary penalties and court-ordered changes to how Meta operates its platforms.
According to Bloomberg, people familiar with the discussions described the talks as sensitive, and no official confirmation has been issued. A spokesperson for Meta had no immediate comment, while a representative of the California attorney general’s office declined to comment. Representatives from the other three lead states, Colorado, Kentucky, and New Jersey, did not immediately respond to requests for comment.
The financial stakes are significant, with Meta’s internal estimates placing the maximum penalty exposure from an adverse verdict at roughly US$1.4 trillion. This figure approaches the company’s total market capitalisation, making a settlement likely to be a far smaller sum. The exposure arises from per-violation fines under the federal Children’s Online Privacy Protection Act, which can compound into enormous totals given the scale of Meta’s underage user base.
The four lead states are pressing additional consumer protection claims under their individual state laws, while all 29 states are pursuing federal claims tied to alleged data collection of minors without parental consent. Meta rejects the states’ claims, characterising the demands as calling for unworkable design changes and an "outlandish payout."
In the trial’s opening week, testimony was provided by Instagram chief Adam Mosseri and various current and former Meta employees. California Deputy Attorney General Megan O’Neill described Meta’s business model to the jury as one designed to "hook the users, hold them for as long as they can, harvest their data, and then hide the truth from the public." Meta founder and CEO Mark Zuckerberg is expected to take the stand in the coming days.
The case, People of the State of California v. Meta Platforms Inc., is one of more than 3,000 federal lawsuits against social media companies consolidated before U.S. District Judge Yvonne Gonzalez Rogers. This follows a previous settlement with 51 US states for up to US$16.7 billion, which included specific product changes regarding teenage user protection.
