A 29-state coalition, joined by California federal authorities, will bring Meta Platforms to a California federal court this August over claims that Facebook and Instagram are designed to be addictive for children and that Meta illegally collects and uses kids’ data, potentially exposing the company to massive damages and sweeping platform changes.

Meta denies the allegations, saying it has implemented safety features, listened to parents and experts, and remains committed to helping young people while pursuing ongoing improvements.

The case follows whistleblower disclosures and broader scrutiny of social media’s effects on youth, with prior outcomes including a multi-million verdict in New Mexico and a Kentucky school district settlement.

For investors, the trial introduces broad uncertainty and could set a precedent affecting the wider social media industry, as thousands of related cases remain pending and attention centers on management’s defense and any potential settlements.

The broader context includes public concern about social media addictiveness, with polling showing high concern and calls for stricter oversight.

The case could lead to significant penalties and platform changes for Facebook and Instagram, with implications for other tech firms facing similar lawsuits, such as Google and TikTok.

A key risk is potential interim court orders or rulings on design features that could force changes to Meta’s product roadmap and day-to-day operations.

The judge has questioned the reasonableness of a $1.4 trillion damages figure, and the jury’s findings may be advisory while the judge determines penalties and remedies.

US District Judge Yvonne Gonzalez Rogers will oversee the trial, which includes an advisory jury to guide the judge’s eventual ruling, with a decision anticipated after the October 2026 trial concludes.

The case features an advisory jury whose findings inform the judge, though the judge is not obligated to follow them.

A decision is expected in October 2026 as the trial wraps up.

Legal analysts say the case could be pivotal for Meta and the broader industry, given potential large damages and platform changes.