Meta Platforms is discussing a mid-trial settlement as it enters the second week of a landmark lawsuit brought by 29 state attorneys general accusing the company of deliberately designing its apps — including Facebook and Instagram — to addict teenagers.
The trial, taking place in a federal court in Oakland, presents a significant risk for the company. The states are seeking huge financial penalties on behalf of the public and sweeping changes to how the platforms operate.
Meta estimates that losing the trial could leave it facing penalties of up to $1.4 trillion — an amount close to its market capitalisation and unprecedented in legal history. A settlement would likely cost the company a far smaller sum.
The Allegations
The lawsuit, filed in October 2023, alleges that Meta “harnessed powerful and unprecedented technologies to entice, engage, and ultimately ensnare youth and teens.” It points to features such as infinite scrolling and push notifications, arguing that these tools were developed to keep young users on the platforms for extended periods.
The states have accused the company of violating state consumer protection laws and federal privacy rules, potentially exposing it to substantial fines that could quickly mount given the millions of young people using Instagram and Facebook.
Testimony Highlights
During the first week of the trial:
- Adam Mosseri, Instagram chief, testified that few teenagers used a crucial safety feature to limit their use before it was turned on by default. He acknowledged that the percentage of teens using the “Take a Break” feature was in the low single digits before Instagram made it the default. He denied that he encourages employees to hide information from him.
- Francesco Fogu, Instagram’s director of product design, acknowledged removing data from a presentation slide indicating that teenage Instagram users encountered 1.5 times more bullying, suicide, hate, nudity, and violent content than adult users.
Meta’s Defense
Meta has pushed back against the claims, calling them “unsubstantiated.” A spokesperson said: “The State AGs may call this a landmark case, but their limited claims are unsubstantiated, and their financial demands are vastly disproportionate.”
“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.”
Recent Setback
Earlier in August, a New Mexico court fined Meta $567 million, ruling that the company should make sweeping changes to its applications and arguing that they contributed to a mental health crisis among young people.
The Bottom Line
Meta is reportedly discussing a mid-trial settlement in the 29-state lawsuit accusing Instagram and Facebook of addicting teenagers. The company faces potential penalties of up to $1.4 trillion if it loses. Instagram executives testified that safety features were underused before being made default, and a designer admitted removing data showing teens encounter more harmful content. Meta has denied the allegations
