Dorothy

Investors are keeping a close eye on opening arguments in the Meta Platforms child privacy case that starts on Tuesday. A group of 29 states filed suit against the Facebook and Instagram parent, arguing that Meta violated a federal child privacy act, various consumer protection statutes and fostered addictive behavior in teens and children. Attorneys for Meta said the company could be on the hook for as much as $1.4 trillion – nearly the total size of Meta's stock market value – though lawyers representing the states told a judge last week that $200 billion is probably a more realistic number.

Meta braces for "astronomical" trial in California Opening arguments begin Tuesday in a federal trial where a coalition of 29 state attorneys general, co-led by California AG Rob Bonta, accuse Meta of designing Instagram and Facebook to be addictive to children and violating child-privacy laws. New Mexico AG Raúl Torrez, who recently won a separate case against Meta in his state that resulted in nearly $1 billion in damages, told CNBC the outcome of the current case "could be astronomical."

Meta is defending against a coalition of 29 state attorneys general who claim that Meta illegally collected and used kids’ data in a case first brought in 2023. The states further allege that Meta designed Facebook and Instagram to be addictive for teens through features such as the “like” button and recommendation algorithms, which caused a wave of anxiety, depression, self-harm and even suicide.

The lawsuit accuses the social media giant of contributing to the youth mental health crisis by knowingly and deliberately designing features that addict children to its platforms. It also argues that Meta routinely collects data on children under 13 without their parents’ consent, in violation of federal law.

The states suing Meta are asking for many more changes to the way Instagram and Facebook operate for young people, too.