Meta is bracing for what could become the costliest legal battle in its history. Four US states — California, Colorado, Connecticut, and New Jersey — are seeking penalties of up to $1.4 trillion from the social media giant, arguing that the company deliberately designed Facebook and Instagram to hook young users while downplaying the risks to their safety.

The figure surfaced on Monday, July 6, in a court filing submitted by Meta itself, in response to the states’ proposed penalty calculation. What makes the number striking is that it is nearly identical to Meta’s current market capitalization, which hovers around $1.5 trillion. If upheld, it would be one of the largest penalties ever imposed in the history of US consumer protection law.

Meta has called the request unprecedented. A company spokesperson said the states’ calculations are «extravagant» and have no basis in fact or law. During a hearing last June, state attorneys general laid out the formula behind the damages request: the penalty amount was multiplied by the number of young users involved. Under the consumer protection laws of the four states, each teenager counted as a platform user would represent a separate, independent violation — the multiplication mechanism that produced such a staggering figure.

The trial opens on August 18

The trial is set to open on August 18 at the federal courthouse in Oakland, California. The same proceeding will also address claims brought by 29 other states, which allege that Meta violated COPPA (the Children’s Online Privacy Protection Act, the US federal law protecting children’s online privacy) by collecting data from children without parental consent.

Meta had sought to have the case dismissed, but last month a judge rejected that request, ruling that significant factual questions remain open: whether the platforms were in fact designed to be addictive, and whether Meta lied when it denied that intent.

For its part, the company continues to deny all allegations, arguing that “social media addiction” is not an officially recognized psychiatric diagnosis and does not appear in any clinical reference manual. Building on that argument, Meta contends that its earlier public statements denying that Facebook and Instagram are addictive cannot be considered misleading. The company also maintains that its platforms were designed for a general audience, not for children under 13.

The consequences may be structural, not just financial

What happens next remains to be seen. On paper, Meta faces an enormous $1.4 trillion penalty, nearly equal to its entire market capitalization. According to several legal experts, however, the final penalty is likely to be far smaller, since the figure represents a theoretical ceiling rather than a realistic expectation.

The real risk for Meta, though, may not be purely financial but structural. A loss in court could result in a settlement forcing the company to redesign its platforms for underage users. Meta could be required to eliminate infinite scroll, limit push notifications, and overhaul the algorithms that drive content profiling and recommendations — with direct consequences for a business model built on selling targeted advertising.

Editor’s note

This article was originally published in Italian on money.it by Alessandro Nuzzo on July 09, 2026 as «Incubo legale per Meta: sul tavolo una richiesta da 1.400 miliardi». It has been translated and adapted for an international audience by the Money.it International desk.