Meta Platforms and state attorneys general have held talks about a potential settlement before the trial concludes, in a lawsuit that accuses the company of intentionally building Facebook and Instagram in ways meant to hook teenagers, according to Bloomberg.
Entering its second week in federal court in Oakland, California, the trial pits the attorneys general of 29 states against the company, with those officials seeking both monetary penalties and court-ordered changes to how Meta runs its platforms. People familiar with the settlement discussions asked not to be identified due to their sensitivity, according to Bloomberg.
A spokesperson for Meta had no immediate comment. A representative of the California attorney general’s office declined to comment, and representatives of the other three states leading the case — Colorado, Kentucky, and New Jersey — did not immediately respond to requests for comment.
Meta’s internal estimates place the maximum penalty exposure from an adverse verdict at roughly $1.4 trillion, a figure approaching the company’s total market capitalization. A settlement would likely amount to a far smaller sum.
At the heart of the states’ case are claimed breaches of both state consumer protection statutes and the federal Children’s Online Privacy Protection Act, laws whose per-violation fines can compound into enormous totals given the scale of Meta’s underage user base. The four lead states — California, Colorado, Kentucky, and New Jersey — are also 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 and has characterized the attorneys general’s demands as calling for unworkable design changes and an “outlandish payout.”
In the trial’s opening week, testimony came from Instagram chief Adam Mosseri alongside various current and former Meta employees whose work involved designing the platforms and examining how teenagers engage with features intended to curb excessive use. Attorneys on the case have indicated that Meta founder and CEO Mark Zuckerberg is also expected to take the stand.
The trial is one of more than 3,000 federal lawsuits against Meta and other social media companies consolidated before U.S. District Judge Yvonne Gonzalez Rogers. California Deputy Attorney General Megan O’Neill described Meta’s business model to the eight-person 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 denied the allegations, saying it had made significant efforts to protect minors online.
The case is People of the State of California v. Meta Platforms Inc., 23-cv-05448, U.S. District Court, Northern District of California (Oakland).