Meta Platforms (META, Financials), the social media and digital advertising company behind Facebook, Instagram, WhatsApp and Threads, is fighting a $1.4 trillion penalty demand from four U.S. states.
California, Colorado, Kentucky and New Jersey accuse Meta of designing Facebook and Instagram to keep young users engaged while misleading the public about platform safety.
Meta disclosed the figure in court filings ahead of an August trial in Oakland, California. The company said the amount is not supported by evidence and has no clear precedent in consumer protection law.
The states reportedly calculated the total by multiplying the estimated number of affected young users by penalties allowed under state law.
The case matters beyond the four states involved. Twenty-nine states have also sued Meta over alleged violations of federal child privacy rules.
For investors, the legal risk is difficult to ignore, even as attention stays focused on Meta's AI spending and advertising growth. A ruling against the company could influence other youth safety cases and force changes to how Meta designs its platforms.