Meta Faces Trial in California as 29 States Seek Accountability
Key Points
- Opening arguments began Tuesday in Oakland federal courthouse with a jury already seated, involving 29 state attorneys general.
- Meta lost a New Mexico case in March requiring $942 million in payments ($375 million judgment plus $567 million abatement fund).
- California generates 98% of Meta's revenue through online advertising, making potential penalties far steeper than New Mexico's outcome.
California carries unique legal weight. Meta derives 98% of its revenue from online advertising, making the company particularly vulnerable to penalties that could force operational changes. Julia Powles, executive director of the UCLA Institute for Technology, Law and Policy, said: "California matters more than any other jurisdiction in the U.S. It's where they are subject to the greatest legal reach, and it's a jurisdiction watched around the world."
The New Mexico case required Meta to improve "age assurance models and tools" using AI and develop an under-13-years-of-age prediction model within two years. Other remedies included making it easier to report underage usage and partnering with schools or child safety organizations to create a reporting portal for flagging suspected underage accounts.
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Torrez noted the plaintiff's focus on app design features and alleged misrepresentations on safety "really provides a blueprint for other states to hold them accountable." This approach sidesteps Section 230 of the Communications Decency Act, which has historically shielded tech companies from legal liability for third-party content.
A separate case involving Meta and Google's YouTube resulted in a March Los Angeles jury verdict finding the companies negligent and failed to warn users of dangers associated with their platforms. Rob Bonta, appointed to the California Attorney General role in 2021 by Governor Gavin Newsom, has made child protection central to his litigation strategy.
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Meta CEO Mark Zuckerberg's massive artificial intelligence investment—potentially costing $145 billion this year—depends heavily on the advertising revenue now at legal risk. Meta has announced its disagreement with the New Mexico ruling and plans to appeal, but California's trial outcome could determine whether the company faces fundamental algorithmic changes or penalties that far exceed the New Mexico precedent.
Why this matters: A California verdict against Meta could establish national standards for social media regulation without requiring congressional action, effectively forcing the company to redesign core features while competitors watch closely. The case represents social media's equivalent of the tobacco industry settlements of the 1990s, with potential to reshape how platforms operate across the country.
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What This Means
If Meta loses the California case, the company faces potential penalties measured in billions of dollars and mandatory product redesigns that could reduce user engagement and advertising effectiveness. A loss could trigger similar enforcement actions in Florida, Texas, and New York, where the damages would scale dramatically with state population. This outcome would mark a turning point where state attorneys general successfully held a major tech platform liable for design choices—establishing precedent that could reshape the social media industry's business model.
Sources: CNBC and other international news outlets.
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