Meta Exploits Youths on Social Media, States Allege at Trial

(Bloomberg) — Meta Platforms Inc. has deceived the public for years by targeting children on Facebook and Instagram with technology designed to turn them into compulsive users and drive up advertising revenue, a lawyer at the California attorney general’s office told a jury.

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In her opening statement at a historic trial in federal court in Oakland, California, Megan O’Neill said the 29 states suing Meta are seeking to hold the company accountable for misleading children and their parents about safety risks and intrusions on privacy.

“Meta’s business model can be summed up with four simple words – hook the user, hold them for as long as they can, harvest their data, and then hide the truth,” she said. “The young ones are the best ones – they are the ones most likely to get hooked, they’re the ones that are most likely to make money in the long run.”

Meta’s attorney is scheduled to present his opening statement next. Meta has denied the states’ allegations, and accused the attorneys general of seeking unreasonable design changes and an “outlandish payout.”

“The AGs offer no proof anyone in their states was misled, claim benign features like having an additional Instagram account somehow harmed their residents, and attempt to penalize Meta for industry-wide challenges like age verification,” the company said in a statement before the trial.

The case carries enormous risk for Meta because the states are seeking not only massive financial penalties, but also court orders that could force the company to change how it operates its platforms.

The trial is especially momentous because it’s focused on alleged violations of state consumer protection and federal privacy laws — which carry fines of as much as $20,000 per violation that can add up quickly when multiplied by millions of young Instagram and Facebook users.

By Meta’s own calculations, if it loses the trial it could face penalties of as much as $1.4 trillion, an amount close to its market capitalization and unheard of in the annals of legal history.

While the attorneys general have not publicly disclosed exactly how much they’re seeking in penalties, O’Neill put the figure closer to $193 billion during a court hearing last week, while suggesting that Meta was pointing to the highest theoretical amount for “shock value.”

Even the lower amount would be among the largest ever litigation payouts, comparable to the $206 billion settlement that state attorneys general struck with tobacco companies over cigarette addiction in 1998.

O’Neill stressed that the case was not about content posted on Instagram and Facebook, but the design of the platforms themselves.

“We are not here to hold Meta responsible for the fact that there are bad people out there that post bad things that may harm kids,” she said. “What you’re going to see throughout this trial is that we are holding Meta responsible for its own conduct: what Meta said and didn’t say, what Meta did and didn’t do, choices that Meta made.”

The trial, which is expected to last about five weeks, comes as social media companies are facing a global backlash over concerns that they profit at the expense of young users, for whom a growing body of research shows that heavy use of the algorithm-driven platforms can be dangerously unhealthy.

While authorities in Australia and Europe have enacted or proposed outright bans for youths in the last year, legislative crackdowns in the US have had limited success, turning the courts into a pivotal battleground.

The case is People of the State of California v. Meta Platforms Inc., 23-cv-05448, US District Court, Northern District of California (Oakland).

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