Meta Faces Trial in California as Coalition of 29 State Attorneys General Pushes for "Astronomical" Penalties

Opening arguments begin Tuesday in a federal trial in Oakland that could force fundamental changes to Facebook and Instagram, as California Attorney General Rob Bonta co-leads a coalition of 29 state attorneys general in a case against Meta Platforms over allegations the company knowingly designed its apps to harm children.

The trial, brought in 2023, will be argued by lawyers representing California, Colorado, New Jersey, and Kentucky. It centers on allegations that Meta fostered addictive behavior in minors and violated federal and state laws, including the Children's Online Privacy Protection Act and various consumer protection statutes.

New Mexico Attorney General Raúl Torrez, fresh off a court victory against Meta in his own state, told CNBC that a loss in California could carry consequences he described as "astronomical" for a company that derives 98% of its revenue from online advertising.

"This is a state with some 2 million people," Torrez said. "If you map that same argument onto California or Florida or Texas or New York, I mean, that's a potentially massive and a market shifting force."

The New Mexico case provides the most immediate precedent. A jury ruled in March that Meta must pay $375 million for violating that state's unfair practices act. A judge subsequently ordered the company to pay an additional $567 million into an abatement fund as part of a second phase involving child sexual exploitation allegations. Meta said it disagreed with the ruling and plans to appeal.

California, however, carries substantially greater legal weight. "California matters more than any other jurisdiction in the U.S.," said Julia Powles, executive director of the UCLA Institute for Technology, Law and Policy. "It's where they are subject to the greatest legal reach, and it's a jurisdiction watched around the world."

Industry observers are comparing the moment to the tobacco litigation of the 1990s, when major cigarette manufacturers were forced to pay billions of dollars and saw their influence significantly curtailed after courts found they had misled the public about the dangers of their products.

The legal strategy employed by the state coalition is designed to route around Section 230 of the Communications Decency Act, which has broadly shielded technology companies from liability tied to third-party content. By focusing on app design features and alleged misrepresentations about safety, the plaintiffs argue that Meta's own choices — not user-generated content — caused the harm.

Torrez said that approach "really provides a blueprint for other states to hold them accountable."

Bonta said in a statement last Monday that Meta "designed a dangerous product for young users, knew it to be dangerous, and then lied to children, families, and the community about how dangerous it was."

Meta pushed back in its own statement, saying the coalition's "limited claims are unsubstantiated and their financial demands are vastly disproportionate." The company added that the AGs "offer no proof anyone in their states was misled" and accused them of attempting "to penalize Meta for industry-wide challenges like age verification."

The trial arrives at a particularly sensitive moment for Meta CEO Mark Zuckerberg, who is relying heavily on the company's advertising revenue to fund a major push into artificial intelligence that could cost as much as $145 billion this year.

The jury in the California case was seated last week in Oakland's federal courthouse. The outcome could compel broad algorithmic changes at Facebook and Instagram — alterations that would affect hundreds of millions of users well beyond California's borders, reinforcing why legal experts and state officials alike are watching this trial as a potential inflection point for the social media industry.

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