Meta Faces Landmark US State Trial Over Child Data and Platform Design

A landmark trial began this week in a federal court in Oakland, California, pitting 29 US states against Meta Platforms, the parent company of Facebook and Instagram. The legal proceeding is expected to last six weeks and could substantially alter how social media platforms operate both in the United States and globally.

The case is being led on behalf of the states by four attorneys general from California, Colorado, Kentucky, and New Jersey. At the center of the dispute is a 233-page claim filed in 2023, which alleges that Meta deliberately designed and monetized its platforms to exploit the psychological vulnerabilities of children and teenagers. Arturo Béjar, a former Meta safety engineer and whistleblower, is slated as a key witness for the states.

Meta has strongly rejected the allegations. During his opening remarks, Paul Schmidt, a lead attorney for the company, stated that Meta has recognized user struggles with social media and has actively attempted to introduce helpful tools.

The states' lawsuit outlines four main claims. First, it alleges exploitative and addictive product design, arguing that features such as infinite scrolls, autoplay, persistent push alerts, visual filters that induce body dysmorphia, and 'likes' stimulate compulsive engagement and intermittent dopamine loops. Internal documents cited in the lawsuit claim Meta studied adolescent brain development, including lower impulse control and high reward sensitivity, to maximize user time on the platforms.

The second claim asserts that Meta concealed internal research linking Instagram use to increased depression, anxiety, body image issues, and self-harm among teenagers, while publicly claiming its platforms were safe. The third claim involves systematic violations of the Children’s Online Privacy Protection Act by harvesting personal data from children under the age of 13 without verifiable parental consent. Finally, the states allege numerous parallel violations of state fair-trading and fraud laws.

Legal representatives for the states noted that potential damages could reach up to US$200 billion, drawing comparisons to the 1998 tobacco settlement between 52 US state and territory attorneys general and major tobacco companies. In addition to financial penalties, the states are seeking court-ordered product redesigns.

Because Meta's primary business model relies on advertising driven by user engagement, the outcome of the trial could have international implications. Legal and industry analysts suggest that maintaining separate, safer product designs exclusively for US users may be technically and economically impractical, potentially exposing Meta to litigation in other global jurisdictions.

As countries monitor the proceedings, alternative regulatory approaches are also being considered globally, including the introduction of a digital duty of care, which would mandate proactive safety standards for tech companies from the design stage onward.

"This landmark trial highlights a critical turning point for digital platforms and accountability in product design. For businesses and entrepreneurs, it signals that user engagement strategies driven entirely by compulsive habits and unverified data harvesting face severe regulatory and legal risks. Companies must increasingly build proactive safety standards into their core business models rather than relying on reactive measures, as global regulators closely watch the outcome of this case to shape future compliance expectations." — Dr. Shishir Gupta, Founder & CEO, StartupLanes