(Bloomberg) -- Meta Platforms Inc. has deceived the public for years by targeting children on Facebook and Instagram with technology designed to turn them into compulsive users and drive up advertising revenue, a lawyer at the California attorney general's office told a jury.
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In her opening statement at a historic trial in federal court in Oakland, California, Megan O'Neill said the 29 states suing Meta are seeking to hold the company accountable for misleading children and their parents about safety risks and intrusions on privacy.
"Meta's business model can be summed up with four simple words – hook the user, hold them for as long as they can, harvest their data, and then hide the truth," she said. "The young ones are the best ones – they are the ones most likely to get hooked, they're the ones that are most likely to make money in the long run."
Meta's attorney is scheduled to present his opening statement next. Meta has denied the states' allegations, and accused the attorneys general of seeking unreasonable design changes and an "outlandish payout."
"The AGs offer no proof anyone in their states was misled, claim benign features like having an additional Instagram account somehow harmed their residents, and attempt to penalize Meta for industry-wide challenges like age verification," the company said in a statement before the trial.
The case carries enormous risk for Meta because the states are seeking not only massive financial penalties, but also court orders that could force the company to change how it operates its platforms.
The trial is especially momentous because it's focused on alleged violations of state consumer protection and federal privacy laws — which carry fines of as much as $20,000 per violation that can add up quickly when multiplied by millions of young Instagram and Facebook users.
By Meta's own calculations, if it loses the trial it could face penalties of as much as $1.4 trillion, an amount close to its market capitalization and unheard of in the annals of legal history.
While the attorneys general have not publicly disclosed exactly how much they're seeking in penalties, O'Neill put the figure closer to $193 billion during a court hearing last week, while suggesting that Meta was pointing to the highest theoretical amount for "shock value."