A jury was seated last week, and now all eyes turn to the courtroom. California Attorney General Rob Bonta is co-leading the case against Meta, accusing the company of designing a product that is unsafe for young users. "Meta designed a product that was dangerous for children, knew it was dangerous, and then lied to children, families, and the community about how dangerous it was," Bonta said. "We are ready to hold Meta accountable for its role in fueling the mental health crisis among young people."
The attorneys general argue that Meta's platforms - including Instagram and Facebook - violate the Children's Online Privacy Protection Act and various state consumer protection laws. They say the company deliberately introduced design features that keep minors hooked while failing to protect them from harmful content.
Meta has attempted to have the case dismissed, but earlier this year, a federal judge ruled that the states could proceed with their claims. That decision set the stage for this trial, which could last for months and involve testimony from current and former Meta executives, child development experts, and perhaps even Mark Zuckerberg.
The trial comes after a series of setbacks for Meta in other legal battles. In New Mexico, a jury directed the company to deposit $567 million into an abatement fund in litigation concerning child sexual exploitation. The same jury also ordered Meta to pay $375 million for breaching consumer protection laws, although Meta has said it will appeal that decision.
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The New Mexico case was still a significant warning shot. Now, the California-led lawsuit could produce an even larger judgment. The states are not just seeking fines; they want structural changes to how Meta designs its platforms. That includes turning off certain default settings for minors, limiting notifications during school hours, and making parental controls more effective.
Meta has pushed back, arguing that it has already invested heavily in child safety tools. The company says it has launched over 50 safety features and employs thousands of people working on youth safety.
For investors, this trial is a major risk factor. Meta's stock has already been volatile this year, and an adverse ruling could send shares lower. The company's revenue is 98% tied to digital advertising, so any disruption to its core products could have serious financial implications.
However, some analysts believe the trial could end with a settlement rather than a judgment. The range of possible outcomes is wide: a large fine, a permanent injunction on certain features, or a mandate to reconfigure recommendation algorithms. Each would have different consequences for Meta's bottom line.
If the case goes badly, Meta could be forced to change its products at a significant cost. That would likely reduce engagement, which would in turn reduce advertising revenue. On the other hand, a narrow ruling might allow Meta to escape with financial penalties while keeping its core business intact.
Either way, this trial is a pivotal moment for the social media industry as a whole. The outcome will likely set a precedent for how platforms design products for minors. For investors, it's a reminder that regulatory and legal risks are no longer just background noise - they can directly affect the bottom line.
As the trial gets underway, the courtroom is expected to be packed. Opening statements will lay out the states' arguments, and the first witnesses could take the stand this week. The trial is expected to last several months, and the verdict - if it comes - will be a landmark moment for the entire tech sector.
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