Meta, the parent company of Facebook and Instagram, is facing a landmark US federal trial that could result in major financial penalties and significant changes to how its platforms operate.
The case, brought by attorneys general from 29 US states, accuses Meta of deliberately designing Facebook and Instagram features to encourage prolonged and potentially addictive use, particularly among children and teenagers. The company is also accused of collecting data from minors.
The six-week trial could expose Meta to damages of up to $200 billion, while the company has warned that potential state penalties could theoretically reach $1.4 trillion.
The financial impact would be enormous. Meta generated nearly $201 billion in revenue in 2025, while reporting $83.2 billion in operating income.
Beyond financial penalties, the lawsuit could force Meta to make major changes to its business model. The states are seeking restrictions on features such as infinite scrolling, changes to algorithms and artificial intelligence systems trained using minors' data, as well as stronger protections and time limits for younger users.
Such measures could directly affect Meta's highly profitable advertising business, which relies heavily on user engagement and the number of advertisements displayed.
Meta has defended its record, pointing to features introduced to help teenagers manage their time and control the advertisements they see. However, the states argue that these measures are insufficient because young users can easily dismiss warnings and continue using the platforms.
The case comes as Meta faces broader financial and strategic challenges. Its Reality Labs division, which focuses on virtual and augmented reality, has reportedly accumulated about $70 billion in losses since 2020, while the company is also investing heavily in artificial intelligence infrastructure.
Meta is additionally facing lawsuits from more than 100,000 parties, including individuals, schools, cities and state governments.
Legal experts say the outcome of the current case could influence future lawsuits against other major social media companies, including TikTok, Snapchat and YouTube.
One analyst described the litigation as potentially becoming the “tobacco litigation of the information age,” suggesting that a major ruling against Meta could encourage a new wave of lawsuits targeting social media companies over alleged harm to young users.
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