The news: Four US states are seeking a combined $1.4 trillion in damages against Meta for allegedly designing Instagram and Facebook to be addictive to young users and misleading the public, per sealed Meta court filings seen by Reuters.

State attorneys general from California, Colorado, Kentucky, and New Jersey said in a June closed-doors hearing that their penalties are based on the number of violations multiplied by fine limits set by state law. That number could be hefty: The states are calculating violations “based on the estimated number of teens and young users affected by Meta’s actions,” per Reuters.

If successful, the states could force Meta to pay damages totaling nearly its entire market value of about $1.5 trillion at a time when Meta is investing hundreds of billions into AI development initiatives.

Zooming out: The news follows a landmark trial in March where a Los Angeles jury found that Meta and Google were negligent in failing to warn young audiences about risks tied to their platforms. Meta was responsible for 70% of the $3 million rewarded in compensatory damages.

That ruling opened Meta and others up to similar litigation, and it is now facing a wave of lawsuits alleging that its platforms are unsafe for children, including an upcoming July trial against Meta, TikTok, and Snap. That case is just one of more than 2,400 lawsuits consolidated in multidistrict litigation over concerns including weak age verification, infinite scroll, and harmful algorithmic design.

Why it matters: If the penalties are imposed in full, Meta could face damages large enough to severely disrupt its business. Even if the company avoids paying the full $1.4 trillion, the sheer volume of lawsuits signals a prolonged legal fight over youth safety that is unlikely to fade anytime soon.