Meta reports that four states are seeking $1.4 trillion in fines during the youth-safety trial scheduled for August.

      Meta has informed a federal court that four U.S. states are seeking $1.4 trillion in penalties, claiming the company designed Facebook and Instagram to attract young users. This amount is referenced in a filing made by Meta on Monday. As reported by Reuters, the figure is alarmingly close to Meta's market capitalization, which is approximately $1.5 trillion.

      This total appeared in Meta’s response to the filings made by California, Colorado, Kentucky, and New Jersey regarding how penalties should be calculated if the states win in court. After rejecting a motion to dismiss the claims, a judge allowed the states to pursue them, and independent estimates suggest that any required payouts could surpass even Meta's substantial AI budget.

      Meta labeled the figure as absurd, stating, “A sanction of that size has no precedent in consumer protection enforcement history,” and contended that the amount lacks evidential support, according to the filing.

      The method by which the states calculated the $1.4 trillion is not fully disclosed, as their filings are sealed. However, during a June hearing, they indicated that they reached the total by multiplying the number of alleged violations by the fines specified in state law. The count of violations depends on the estimated number of teens and young users claimed to be affected by Meta's actions. By applying a fine per violation across millions of minors, the calculations quickly escalate to a number that rivals the valuation of a trillion-dollar company.

      Meta views the $1.4 trillion as a theoretical maximum proposed by the states rather than a probable result, and no court has approved the figure. Such penalty calculations are usually significantly reduced, if they're even granted, and the sealed filings from the states mean the public is primarily seeing this ceiling through Meta’s perspective.

      The trial is set to begin on August 18 before U.S. District Judge Yvonne Gonzalez Rogers, who oversees the consolidated federal case in California's Northern District. She previously denied Meta's attempt to cancel the trial, determining that genuine disputes remain regarding whether the apps were designed to be addictive and whether Meta misrepresented their safety.

      The case combines two different legal actions. Twenty-nine states are pursuing claims under the federal Children’s Online Privacy Protection Act, while California, Colorado, Kentucky, and New Jersey present separate claims that Meta violated state consumer protection laws by misleading the public about its apps.

      Judge Gonzalez Rogers has indicated her intention to appoint an advisory jury for at least some of the states' claims, which is an unusual arrangement that allows her to make the ultimate decision on liability and any potential penalties.

      This demand arrives amid a string of unfavorable courtroom outcomes for Meta. A jury in New Mexico recently concluded that the company had hidden information regarding child sexual exploitation and mental health issues associated with its apps. Additionally, a separate jury in California delivered an early verdict in a social media addiction case, marking the first instance of such a case reaching a jury.

      Meta denies any wrongdoing and claims that the attorneys general have provided no evidence of deception concerning addictiveness, partly because “social media addiction” is not recognized as a psychiatric diagnosis—an argument the company has consistently made while also implementing stricter safety settings for teens across its platforms.

      Over 40 state attorneys general have filed child-safety lawsuits against the company, and the August trial is just one front in this ongoing battle. Regardless of the advisory jury's opinion on the trillion-dollar demand, the figure itself is likely to influence public perception of a conflict that has already outlasted several rival platforms’ decisions to settle.