A landmark trial began in the United States on Tuesday, as 29 states jointly sued Meta—the parent company of Facebook and Instagram—accusing it of designing platforms that encourage endless scrolling among young users, fostering addiction, and collecting minors' data without proper consent.
According to the lawsuit, Meta deliberately optimized its algorithms to boost engagement, trapping underage users in an endless content loop. The plaintiffs are seeking $200 billion in damages—nearly the company's entire 2025 revenue (almost $201 billion)—along with mandatory changes to how its platforms operate.
This represents the largest potential penalty Meta has ever faced, dwarfing earlier fines of $375 million (awarded by a New Mexico jury in March) and $567 million (ordered by a judge earlier this month). Meta has claimed official penalties could reach as high as $1.4 trillion under federal law, but that figure is widely seen as unrealistic.
The trial is expected to last up to six weeks. If the states prevail, Meta could be forced to remove the infinite scroll feature—a mechanism that maximizes ad impressions, its primary revenue engine—and strip out algorithms and AI models built on minors' data. The plaintiffs also seek time-use limits for younger users.
Meta has dismissed the allegations, citing existing safeguards such as time-management prompts (introduced in June 2023) and ad controls for teens (from January 2023). Spokesperson Stephanie Otway said: “We are proud of our strong protections for teens and look forward to presenting our case in court.”
The suit’s impact may extend beyond Meta, potentially opening the door to similar actions against platforms like TikTok, Snapchat, and YouTube. Analysts have called it “the tobacco lawsuit of the information age.” According to Los Angeles attorney Tre Lovell, the outcome will set a precedent for more than 100,000 pending cases against Meta and could lead to a global settlement.
Meanwhile, Meta faces other financial pressures. Its Reality Labs division (virtual reality and metaverse) has lost $70 billion cumulatively since 2020. AI investment costs have surged, and operating cash flow dropped from $12 billion in Q1 to $784 million in Q2. Meta acknowledged in SEC filings that defending lawsuits is costly and could create a significant burden.
