The Number That Boggles the Mind
Meta brought in nearly $201 billion in revenue last year and was sitting on more than $90 billion in cash and marketable securities as of the end of June. Now a federal courtroom in Oakland, Calif., is stress-testing what it would actually take to break a balance sheet that size.
California, Colorado, Kentucky, and New Jersey — the first four of 29 state attorneys general that sued Meta in 2023 — have accused the company of misleading the public about the risks its platforms pose to young users and of designing features on Instagram and Facebook that keep children and teenagers hooked. The theoretical maximum penalty under the states' own theory of the case: $1.4 trillion.
'It's a number that boggles the mind, frankly,' Eric Goldman, co-director of Santa Clara University School of Law's High Tech Law Institute, told Fortune. At its most extreme, Goldman said, the damages Meta has described could 'essentially transfer the value held by Meta's stockholders to the public' — amounting, in his words, to asking the company to 'turn in the keys and walk away.'
Why State AGs Carry Extra Firepower
The case is structurally different from the wave of private lawsuits Meta is already fighting. State attorneys general can bring claims under the Children's Online Privacy Protection Act — COPPA — that private plaintiffs cannot, and they can seek remedies calibrated to harms affecting potentially millions of people rather than individual plaintiffs.
'The stakes might be higher in this case because the damages awards are going to measure potentially many millions of people's harms,' Goldman said.
New Mexico offers a preview of the financial scale possible at the state level. A jury there found Meta liable for 75,000 violations of the state's consumer protection law, producing $375 million in civil penalties. A judge subsequently found Meta's platforms constituted a public nuisance and ordered an additional $567 million toward youth mental-health programs, bringing total financial liability in that case to $942 million. Meta is appealing.
Meta Pushes Back
Meta spokesperson Stephanie Otway called the AGs' financial demands 'vastly disproportionate' and their claims 'unsubstantiated.' She said the states have not shown that anyone in their jurisdictions was actually misled or harmed by the features at issue, and accused the coalition of trying to penalize Meta for 'industry-wide challenges like age verification.'
'Rather than sticking to the facts or the law, the states have instead decided to chase an outlandish payout,' Otway said. 'We stand by our record of creating strong protections for teens.'
The eight-person jury hearing the case is purely advisory. U.S. District Judge Yvonne Gonzalez Rogers retains the ultimate decision on liability and remedies. James Grimmelmann, a professor of digital and information law at Cornell University, told Fortune he does not expect the trial to end with a penalty that bankrupts Meta, noting that even a high jury number 'could be revised' by the judge or on appeal.
Less than 1% of Meta's revenue comes from teens on Instagram — a figure Meta's critics say is beside the point. Goldman agreed: 'The relevant question is how much harm is Meta causing in society.'
What the Market Should Watch
The Oakland trial is not simply a child-safety proceeding. It is a live experiment in whether a coalition of state governments can use consumer-protection and privacy statutes to impose liability so large it functionally transfers corporate value to the public treasury — without a single shareholder vote, without an act of Congress, and without the guardrails that antitrust law normally requires.
Capital rewards clear rules. A legal environment in which 29 attorneys general can credibly threaten a $1.4 trillion penalty against a profitable, law-abiding public company is not a clear-rules environment. Whatever the jury recommends and whatever Judge Gonzalez Rogers ultimately orders, every platform company with a teen user base is watching this docket. The precedent being written in Oakland will price into valuations long before any verdict is final.
