29 states in US want Meta to change how Facebook and Instagram operate and give $1.4 trillion penalty; the case now threatens Mark Zuckerberg's AI plan

In a fresh setback, Mark Zuckerberg's Meta is facing a $1.4 trillion lawsuit from 29 US states who want the tech giant to change the way its Facebook and Instagram operates.

While Meta's potential exposure has been placed as high as $1.4 trillion, the case could have consequences beyond a financial penalty, with the states seeking remedies that could affect the company's artificial intelligence strategy.

The states are seeking court orders that could require Meta to change how Facebook and Instagram operate, including restrictions for younger users and modifications to features such as infinite scrolling and recommendation algorithms. They are also seeking the deletion of personal data collected from children under 13 and, potentially, AI models and algorithms trained using that data.


Such a remedy could create a direct challenge for Meta's AI ambitions. The company has been investing heavily in artificial intelligence, and models trained using user data form part of the broader technology infrastructure it is developing. If the court orders Meta to remove models or algorithms trained with data that was allegedly collected from children without the required consent, the ruling could force the company to review, modify or discard parts of its AI systems.

The trial centers on allegations that Meta knowingly designed features including infinite scrolling, autoplay and algorithm-driven recommendations to keep young users engaged for longer periods. The states argue that these features encourage prolonged and compulsive use.

The lawsuit also accuses Meta of misleading the public about the safety of its platforms. California, Colorado, Kentucky and New Jersey are leading claims that Meta violated state consumer protection laws by misrepresenting the safety of Facebook and Instagram and knowingly designing features that increased the amount of time young users spent on the platforms.

A separate claim involving all 29 states alleges that Meta violated the federal Children's Online Privacy Protection Act, or COPPA. The states claim Meta knew children under 13 were using its services and collected their personal data without obtaining the required parental permission.

Is Meta really facing a $1.4 trillion penalty?

The $1.4 trillion figure does not represent a penalty that has already been imposed on Meta. It reflects the company's maximum potential exposure based on the number of alleged violations and applicable penalties outlined in court filings.

Meta has described the figure as "outlandish."

During a recent hearing, California lawyer Megan O'Neill suggested that a figure closer to $193 billion could be more realistic. Judge Yvonne Gonzalez Rogers has also questioned the $1.4 trillion calculation, calling it "unreasonable."

The final amount, if any, will be determined by the judge.

Zuckerberg and Mosseri could testify

The five- to six-week trial could feature testimony from Meta CEO Mark Zuckerberg and Instagram chief Adam Mosseri. Current and former Meta employees, along with experts in technology and psychology, are also expected to testify.

Zuckerberg has previously faced questions about Instagram's effect on users. During testimony in another case earlier this year, he said Instagram was intended to be "useful," rather than addictive.

"Instagram is meant to be useful, not addictive."

Meta rejects the allegations

Meta has denied the states' claims and argued that the attorneys general have not provided sufficient evidence to support their case.

"The State AGs may call this a landmark case, but their limited claims are unsubstantiated and their financial demands are vastly disproportionate."

The company has also challenged the allegations surrounding its platform features, age verification and claims that users were misled.

"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."

Meta has defended its record on teen safety and criticized the financial demands made by the states.

"Rather than sticking to the facts or the law, the states have instead decided to chase an outlandish payout. We stand by our record of creating strong protections for teens, and look forward to making our case in court."

What happens next

The Oakland trial is expected to last five to six weeks, with testimony from Zuckerberg, Mosseri and other Meta employees likely to be closely watched.

The outcome could determine not only whether Meta faces significant financial penalties but also whether it must make major changes to Facebook and Instagram. More importantly for the company, court-ordered deletion or modification of AI models trained using children's data could create a new challenge for Meta's broader AI strategy.

The case could therefore become a test of how far regulators and courts can reach into the technology companies use to build and train AI systems when the underlying data is alleged to have been collected unlawfully.