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    Home»Money»Meta business model in trouble from $1.4 trillion lawsuit
    Money

    Meta business model in trouble from $1.4 trillion lawsuit

    BY Tony Owusu July 9, 2026No Comments0 Views
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    If you have ever caught yourself doom scrolling on Instagram or Facebook for hours on end and felt bad, don’t; the technology is working exactly how it was intended to. Everything from the length and style of the Reels to the algorithms’ encyclopedic knowledge of your likes and dislikes is designed to keep you on the social media platforms.The addictive features of social media have been the topic of intense study for years. In 2019, scientists published a study, showing that the addictive nature of smartphones and the apps on them has numerous detrimental mental effects, with links to anxiety disorder and depression.Those issues have been found to be even more acute in children and teenagers. While most might assume that personal responsibility is the only way to break the cycle and reclaim one’s mental health, at least four states are suing Meta Platforms (META), claiming that the company is making its number one product addictive on purpose, to the detriment of public health. Four states sue Meta for a combined $1.4 trillionMeta Platforms, the parent company behind Facebook, Instagram and WhatsApp, is facing penalties of up to $1.4 trillion stemming from lawsuits brought by California, Colorado, Kentucky and New Jersey on behalf of their citizens. This week, Meta submitted a court filing responding to the state attorneys general’s filings on how penalties should be calculated should the states win the trial. “A sanction of that size has no analog in the history of consumer protection enforcement,” Meta said in the filing, according to Reuters. Meanwhile, in a statement to Reuters, Meta says that “the plaintiffs’ outlandish calculations have no basis in fact or law.”Meta’s entire market capitalization is about $1.4 trillion. While the state’s filings are sealed ahead of an August trial date in the U.S. District Court for the Northern District of California, the attorneys general have said that they are calculating penalties by multiplying the number of violations by fine amounts set by state law.Last month, the court fully denied an attempt by Meta to obtain a summary judgment that would have terminated the lawsuit, which alleges that Meta “designed and deployed harmful features on its platforms that addict children and teens to their severe mental and physical detriment, all while misleading the public regarding the existence and severity of these risks.”Meta has also been sued by another 29 states, with most of them alleging that the company violated the federal Children’s Online Privacy Protection Act by collecting data from children without proper parental consent. The August trial will address all claims brought under that law, plus the four states alleging that the company violated their state laws as well, according to Reuters. Meanwhile, Meta has denied the allegations and says that the states have no evidence that it misled consumers about its platforms’ alleged addictiveness because “social media addiction” is not an established psychiatric condition.

    Oscar Wong / Getty Images

    Meta isn’t the only social media company being suedSince the pandemic, TikTok has surpassed Instagram and Facebook in popularity among young people, and that platform is seemingly just as addictive as Meta’s. Recently, TikTok settled with a Florida teen who sued the company over the social media platform’s addictive nature, which he claimed harmed his mental health. The 15-year-old boy accused TikTok, along with Meta, YouTube and Snapchat of designing their platforms to be addictive through features like infinite scroll and autoplay. “He’s still a kid. He is still in high school and evaluating the impact that social media has had on his very young life,” Emily Jeffcott, his attorney, told NBC News. “I think that should really be a lens that’s worth paying attention to.”YouTube also settled with him, leaving Meta and Snap as the only two defendants left to face the jury in a trial expected to start July 27 in Los Angeles County Superior Court. Related: Meta just picked a fight with Amazon’s cash cow   

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