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Meta could be on the hook for an eyewatering sum. The tech giant is facing lawsuits from four states over allegations it’s fueling a teen mental health crisis. If those states prevail, Meta could pay up to $1.4 trillion in penalties (1), a sum nearly the size of its valuation.
The massive figure, which Meta has called “outlandish,” (1) is based on how the attorneys general of California, Colorado, Kentucky and New Jersey say penalties should be calculated if they win the case. The states have accused Meta of violating laws protecting consumers by misleading them about the safety of social media platforms like Facebook and Instagram.
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The trial is set to begin in August. It will also include (2) 29 other states pursuing claims in federal court over allegations that the company violated the Children’s Online Privacy Protection Act by collecting data from underage users without parental consent.
Meta has also been accused (2) of purposefully designing Facebook and Instagram to be addictive to children, causing serious mental health issues.
“Our lawsuit alleges Meta has prioritized profits over the safety of kids and fueled the mental health crisis we see impacting a generation of American children,” a spokesperson for the California attorney general’s office (3) said in a statement.
Meta disputes proposed remedies
The states filings are still sealed, but Reuters reports (4) that during a June court hearing, the states said the massive penalties were calculated by multiplying the number of violations by fine amounts set in state law. The number of violations is reportedly based on the estimated number of impacted young users.
Meta has denied any wrongdoing, arguing there is no evidence it misled consumers about the alleged addictiveness of its platform.
“A sanction of that size has no analog in the history of consumer protection enforcement,” the company said.
The Mark Zuckerberg-led company attempted to get the case dismissed last month, but the bid was rejected by a federal judge (5).
Read More: 7 top habits of 'quietly wealthy' Americans. How many do you follow?
The cases against major tech companies pile up
Meta and other major tech companies like TikTok, Snap, and Youtube face thousands of other pending lawsuits (6) brought by school districts, parents and governments over claims they knowingly designed their social media apps to fuel addictions among children and teens.
Meta has already suffered legal setbacks this year, after losing back-to-back court cases in March. A jury in New Mexico (7) found that Meta failed to protect children online and misled the public about the risk of its apps. Meta was also found liable in California for fueling social media addiction (8) for a woman identified as KGM.
In those cases, Meta was required to pay $375 million in penalties and $6 million in damages respectively — just a fraction of what the company is facing in this new round of suits.
Meta did not respond to Moneywise’s request for comment in time for publication.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Court Listener (1); New York Post (2); Yahoo Finance (3); Reuters (4), (5); The Guardian (6); New Mexico Department of Justice (7); CNN (8)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
