States Want $1.4 Trillion From Meta. That's Nearly Its Entire Market Cap.

Meta Platforms NASDAQ:META disclosed that California, Colorado, Kentucky, and New Jersey states are seeking $1.4 trillion in penalties, a figure close to Meta's entire market cap of roughly $1.5 trillion, in a trial scheduled for August in Oakland, California. The states calculated the figure by multiplying the estimated number of teen and young users affected by Meta's conduct by fine amounts set under state law. Meta said the amount was unsupported by the evidence, arguing "a sanction of that size has no analog in consumer protection enforcement." Meta shares are up 1.02% in premarket.

The trial will address claims brought under that law, plus the four states' allegations that Meta violated state consumer protection laws by misleading the public about the safety of its platforms. Twenty-nine states in total have sued Meta in federal court. Last month U.S. District Judge rejected Meta's bid to dismiss the case, finding factual disputes remained over whether the platforms were addictive and whether Meta falsely denied designing them that way. A separate trial covering 14 additional states is set for February.

Meta, Snap NYSE:SNAP, Alphabet's NASDAQ:GOOGL YouTube, and ByteDance's TikTok all face thousands of related lawsuits across federal and state courts.