Opening arguments began in a California-led trial against Meta Platforms, brought by a coalition of 29 state attorneys general alleging the company designed Facebook and Instagram to be addictive to children and teens. New Mexico's attorney general warned the consequences for Meta could be "astronomical." Meta already lost a case in New Mexico that will cost it nearly $1 billion, but California's case, backed by far more states and a much larger population, could be dramatically more expensive. Meta's own attorneys have said the consolidated case could lead to damages as high as $1.4 trillion, while the states' lawyers estimate a more likely $200 billion. Meta gets 98% of its revenue from online advertising, an extraordinarily concentrated exposure to whatever penalties this case produces. As of August 17, Meta's stock is down only 12.52% this year, suggesting investors see this as a manageable legal risk, but the size of the numbers being discussed means this trial alone could move the stock far more than any single quarter of AI spending news.
Meta Platforms Inc.Meta faces a trial with potential damages up to $1.4 trillion for addictive design, directly threatening its ad revenue.
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