Opening arguments are set to begin Tuesday in a federal trial that could determine the future of key features on Facebook and Instagram, as California Attorney General Rob Bonta co-leads a coalition of 29 states against Meta. The jury was seated last week in Oakland’s federal courthouse, setting the stage for what legal experts are calling social media’s ‘Big Tobacco’ moment.
The case, originally brought in 2023, alleges that Meta fostered addictive behavior in teens and children, violating the Children’s Online Privacy Protection Act (COPPA) and various state consumer protection laws. Lawyers representing California, Colorado, New Jersey and Kentucky will argue the unified case, which comes on the heels of a nearly $1 billion judgment against Meta in New Mexico earlier this month.
New Mexico Attorney General Raul Torrez, who secured that victory, told CNBC the stakes in California could be ‘astronomical’ for a company that generates 98% of its revenue from online advertising. Meta CEO Mark Zuckerberg is relying on that cash to fund an AI bet that could cost as much as $145 billion this year.
A ‘blueprint’ from New Mexico
Torrez said the New Mexico case provided a ‘blueprint’ for other states to hold Meta accountable, focusing on app design features and alleged misrepresentations about safety. That approach allows states to sidestep Section 230 of the Communications Decency Act, which has historically shielded tech companies from liability for third-party content.
In New Mexico, a jury in March ordered Meta to pay $375 million for violating the state’s unfair practices act, and the judge later added $567 million to an abatement fund in a second phase involving child sexual exploitation allegations. Meta said it disagrees with the ruling and plans to appeal.
Torrez noted that New Mexico’s population of roughly 2 million pales in comparison to California’s, saying, ‘If you map that same argument onto California or Florida or Texas or New York, I mean, that’s a potentially massive and a market shifting force.’
What states are seeking
In court filings, the state AGs are seeking ‘permanent injunctive relief, on a nationwide—rather than state-by-state—basis’ for any COPPA violations. If Meta is found to have violated federal law, the states want the company to delete all personal data of children under 13, along with the algorithms and models trained on that data.
For state consumer protection violations, they want Meta to remove ‘certain addictive design features,’ including infinite scroll, autoplay, ephemeral content, beauty filters and ‘engagement-optimized algorithms.’
Meta has pushed back, saying the AGs’ ‘limited claims are unsubstantiated and their financial demands are vastly disproportionate.’ The company added, ‘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.’
Potential damages
Meta’s attorneys have said the consolidated trial could lead to damages as high as $1.4 trillion, while lawyers for the states told presiding Judge Yvonne Gonzalez Rogers last week that $200 billion is a more likely figure.
Michael Coffey, a defense litigator at Coffey Modica, said the case could define a state AG’s career, but noted that victims may see little of the payout. ‘It’s all going to go to government, and then they’re going to dole it out, and then the plaintiffs’ bar is going to take a cut out of it,’ he said.
Beyond money, court-ordered design changes could be more damaging, said Laura Marquez-Garrett, an attorney with the Social Media Victims Law Center who worked on the recent Los Angeles case against Meta and Google’s YouTube. ‘They have the ability that private plaintiffs typically do not have to actually force these companies, through the court system, to change their business model, their design decisions, all of that,’ she said.
Wall Street underrating risk?
Torrez believes investors are underestimating the potential impact of a California loss. Meta’s stock is down 11% this year, with most analyst concern focused on the company’s massive AI infrastructure spending rather than legal exposure.
‘The analysts aren’t pricing this correctly right now,’ Torrez said. ‘That California judgment by itself could be gargantuan enough that it changes the ability of this company to do what it needs to finance into the future.’
The trial comes after Meta and YouTube lost a separate case in March, when a Los Angeles jury found the companies negligent for failing to warn users about platform dangers. Meta also faces additional lawsuits, including a school district trial expected in Northern California next year, after the first consolidated district cases settled this summer.
Source: www.cnbc.com — https://www.cnbc.com/2026/08/17/meta-attorneys-general-california-federal-trial-astronomical-consequences.html
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