Why Meta is facing $1.4T penalty demand in US

Why Meta is facing $1.4T penalty demand in US

Meta Platforms has revealed that four US states are seeking a whopping $1.4 trillion in penalties from the company.

The staggering figure was disclosed in a court filing yesterday.

It stems from allegations that Meta intentionally designed its Facebook and Instagram platforms to be addictive for younger users, while also misleading the public about their safety.

Meta disputes staggering penalty amount

The $1.4 trillion figure, which is nearly equal to Meta's market capitalization of about $1.5 trillion, was presented by the company in response to the attorneys general's filings on how penalties should be calculated if they win at trial.

However, Meta has disputed this amount, claiming it is not supported by evidence and "has no analog in the history of consumer protection enforcement."

States involved in the case and penalty calculations

The states involved in the case, California, Colorado, Kentucky, and New Jersey, are using a specific method to calculate penalties.

They are multiplying the number of alleged violations by fine amounts set by state law.

The number of violations is based on how many teens and young users are believed to have been affected by Meta's actions.

Meta denies allegations of misleading consumers

Meta has denied allegations, arguing that attorneys general have no evidence of it misleading consumers about its platforms' alleged addictiveness. The company contends that "social media addiction" is not a recognized psychiatric condition, and therefore claims that its platforms were not addictive cannot be false.