Business and Economy

Meta settles $16.68bn lawsuit over child addiction claims, agreeing to major changes in Facebook and Instagram features.

Meta Platforms has agreed to settle a lawsuit that accused the company of designing Facebook and Instagram in a way that addicted children, misled consumers about safety, and collected personal data of children on the platform.

On Wednesday, the social media giant agreed to pay a maximum of $16.68bn as part of a settlement to resolve claims brought in the United States case, championed by a coalition of 29 US states. The case, which started on August 18, was expected to last six weeks.

Meta, based in Silicon Valley in California, has also agreed to make changes to Facebook and Instagram nationwide as part of the settlement. Among these are daily usage limits of two hours for those under the age of 18, which can only be removed by a parent, and nighttime blocks.

The California State Attorney General’s Office said that the Mark Zuckerberg-led company would also identify and remove children under the age of 13 from the platform.

Meta denied any wrongdoing as part of the settlement, which still needs court approval. It had faced up to $1.4 trillion in fines in the case, but the coalition had been seeking a penalty closer to $200bn.

The settlement comes after a loss in a comparable landmark case in New Mexico, where a jury ordered Meta to pay $375m in March and another $567m in August.

Meta’s stock tumbled in early trading on Wall Street, down 0.1 percent since the market opened.

The administration of United States President Donald Trump has announced new economic sanctions on Tehran, describing the measures as an “economic D-Day” as the US war on Iran approaches the six-month mark.

US Treasury Secretary Scott Bessent announced the sanctions on Monday, alongside a naval blockade of Iranian ports.

Bessent said the sanctions target key sources of Iran’s revenue, including its oil and gas industry, and called on countries around the world to cut economic ties with Tehran.

What are the sanctions?

The Treasury Department said the sanctions will target Iran’s aviation, digital assets, gold, technology and shipping sectors, as well as impose sanctions on 60 specific individuals and vessels.

“The main point is that Iran seems to have much less room than it did in previous years to simply work around sanctions,” Peiman Salehi, a Tehran-based geopolitical analyst, told Al Jazeera.

Bessent also said on Monday that the new sanctions expose Tehran’s trade partners to secondary penalties. According to a Treasury Department release on Monday, the targets include ships based in or associated with countries including Singapore, China, and Hong Kong.

“Today’s sanctions are mostly incremental, but are part of trying to intimidate remaining trading partners into cutting ties [with Iran],” said Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security think tank.

“There’s a lot of signalling and bluster aimed at getting other countries to crack down on entities involved in grey-zone trade, but new measures are mostly incremental for now,” she said. Grey-zone trade refers to both illegal, underground trade and trade that is unsanctioned but difficult.

The Treasury Department said Iran has used cryptocurrency to circumvent its longtime sanctions and facilitate transactions involving the Islamic Revolutionary Guard Corps (IRGC) and members of the Iranian regime. The department also said Iran has used gold to help prop up the value of its currency amid economic instability.

The new shipping sanctions target Iran’s state-linked shipping fleet, which the Treasury Department alleges is being used to transport oil as well as “sensitive weapons components”.

The technology sanctions are intended to restrict Iran’s acquisition of materials that could be used in its weapons programmes. The aviation sanctions target Iranian airlines that the Treasury Department alleges are being used to transport weapons and military personnel, as well as financial resources to Iran’s proxies.

Washington also indefinitely suspended several broad exceptions to its ongoing sanctions on Iran, including those covering academic exchanges, personal money transfers and certain sporting activities. Organisations currently engaged in those activities have until September 8 to wind down their operations.

Ziemba says these measures “will have more effect on Iranians, not just the regime”.

What sanctions were already in place?

Washington’s sanctions on Iran have been in place since 1979, after students took hostages at the US Embassy in Tehran, and increased over the next 45 years. Sanctions were briefly paused, however, after the administration of President Barack Obama and world powers signed a nuclear deal with Tehran in 2015. But the Trump administration withdrew from the deal during its first term, in 2018, bringing back old penalties while adding new ones.

Washington imposed new sanctions during Trump’s second term, many of them before the US and Israel first struck the country on February 28.

In February 2025, the Treasury Department sanctioned 30 individuals and vessels involved in the “brokering [of] the sale and transportation of Iranian petroleum-related products”, according to a department release. The targets were based in several countries, including India and China.

In December 2025, Washington sanctioned 29 vessels it accused of being part of a so-called shadow fleet used to transport Iranian petroleum. It also sanctioned Egyptian businessman Hatem Elsaid Farid Ibrahim Sakr over his businesses’ alleged ties to seven of those 29 vessels. The measures continued the 1979 sanctions campaign against Iran’s oil industry.

The Treasury Department stepped up the sanctions again in April 2026, targeting another two dozen individuals, companies and vessels operating within the network of Iranian oil shipping magnate Mohammad Hossein Shamkhani, the son of now-deceased senior Iranian security official Ali Shamkhani.

Later that same month, the Treasury also targeted what it described as “regime-linked cryptocurrency” and said it had seized nearly half a billion dollars from so-called “shadow banking networks”.

How have sanctions affected US consumers?

Pressure on the Iranian oil market, both through existing sanctions as well as the current war, has tightened the rest of the globe’s oil supply and affected countries that buy Iranian oil.

China, for example, is the primary destination for Iranian oil, buying roughly 90 percent of Iran’s crude oil exports. Beijing bought 1.4 million barrels per day in 2025.

At the same time, Asian markets, China included, also heavily rely on oil travelling through the strategically vital Strait of Hormuz, where roughly one-fifth of the globe’s oil transited before Iran choked off the route.

This has put pressure on the global oil supply, meaning the benchmark for crude oil has ticked up, translating to higher prices on fuel and food.

For US consumers, that has been most apparent at the petrol pump. The average price for a gallon of petrol (3.78 litres) is $4.09, up from $2.98 on February 28 when the US and Israel first struck Iran, according to the American Automobile Association (AAA), which tracks daily petrol prices.

Experts warn that if Iran retaliation accelerates, it could hit Americans hard.

“If sanctions provoke Iranian retaliation against Gulf shipping, materially reduce oil exports, or cause insurers and shipping companies to avoid the region, then Americans could feel it very quickly through gasoline, diesel, airfares, freight costs and ultimately inflation,” John Deal, managing director of capital markets at Post Oak Group investment bank, told Al Jazeera.

The economy and Iran are emerging as key issues heading into the US midterm elections, with voters expressing dissatisfaction on both fronts. That could put pressure on Republicans in competitive races, including in traditionally red states such as Texas.

A late-July Reuters/Ipsos poll suggested that only about a third of Americans supported the war, while just 28 percent of respondents in a CNN poll approved of Trump’s handling of Iran.

On the economy, an AP/NORC poll suggested that 32 percent of Americans approved of Trump’s performance. A recent Reuters/Ipsos poll, meanwhile, suggested that Democrats were narrowly ahead of Republicans on which party voters trust more to handle the economy—the first Democratic advantage in roughly a decade.

How are the sanctions affecting markets?

The latest sanctions announcement is weighing on Wall Street as well as the oil and gold markets.

On the heels of the announcement, the price of gold, largely considered a safe investment during times of economic uncertainty, jumped by 0.8 percent to $4,639.49 per ounce (28 grams) in midday trading, ticking up to its highest level since mid-May.

As for oil, prices pulled back on Monday after two weeks of gains. The price of the global benchmark Brent crude tumbled by more than 2 percent on Monday to $85.22 a barrel.

On Wall Street, the major indices are mixed amid the latest sanctions news as well as Trump’s announcement of new tariffs on Canada. The Nasdaq is down 0.5 percent, and the S&P 500 is down 0.2 percent. The Dow Jones Industrial Average, however, is trending in positive territory, 0.2 percent higher than the market open on Monday.

The oil sector is taking a hit. Chevron is down 0.8 percent, ExxonMobil tumbled 0.9 percent, BP fell more than 2 percent, and Shell is down 0.2 percent.

Saudi Arabia’s Crown Prince, Mohammed bin Salman, (MBS), is on the second day of his two-day state visit to France, where he’s meeting President Emmanuel Macron.

In this explainer, we outline what they are expected to discuss and examine how their latest meetings build on an already evolving relationship.

What is on the agenda?

MBS’s visit to Paris began on Sunday evening alongside President Macron at the closing ceremony of the Esports World Cup. It was the first time the Esports tournament, which includes competitions ranging from video games to chess, had been held outside Saudi Arabia.

On Monday, Macron and Bin Salman are expected to sign several agreements on health, transport and energy.

French media reported that a deal to build a Dragon Ball-themed amusement park, backed by a Saudi investment fund and inspired by the iconic Japanese manga series, could be signed.

Valerie Pecresse, President of the Regional Council of Île-de-France in Greater Paris, told French broadcaster TF1 that the regional government had been working on the project for 18 months.

“There is a very important meeting at the Elysee today that may result in the signing of this agreement. We are waiting for the signature,” she said, describing the project as “on the scale of Disneyland”.

Bin Salman and Macron are also holding bilateral discussions on regional security and their economic ties.

That is expected to include discussions about energy routes that bypass the Strait of Hormuz, such as new pipelines, capacity upgrades and alternative port networks.

France is a major buyer of Saudi oil and mineral products.

Since the start of the US-Israeli war on Iran on February 28, shipping has been severely disrupted in the Strait of Hormuz – the vital waterway on which oil exporters in the Gulf are heavily reliant and where 20 percent of the world’s oil and natural gas supplies are shipped from during peacetime. The disruption sent oil prices soaring.

Before the war, a barrel of Brent crude – the global benchmark – cost about $66. Over the course of the conflict, prices have climbed above $100 – hitting a high of $119 early on in the war.

On Monday, Brent was trading around $93 a barrel.

Bin Salman and Macron are also expected to discuss the war in Iran, the bloodshed in Palestine, as well as developments in Syria and Lebanon, where Israel occupies around one-fifth of its territory.

Other expected topics on Monday’s agenda include global events that Saudi Arabia is set to host in the coming years, including Expo 2030, focusing on sustainability and urban innovation, and the 2034 football World Cup.

How much trade does Saudi Arabia do with France?

The two countries have a fairly equal trading balance.

In 2024, France exported $4.5bn worth of goods to Saudi Arabia and imported $4.6bn worth, according to data from the Observatory of Economic Complexity (OEC), an online platform that compiles and visualises international trade statistics.

Refined petroleum accounted for 72 percent of Saudi Arabia’s exports to France in 2024. Besides refined petroleum, Saudi Arabia exported crude petroleum and other mineral products to France. It also exported small amounts of machinery, chemicals and cars.

France’s exports to Saudi Arabia in 2024 were more diverse, including airliners, helicopters, gas turbines, pharmaceutical products and perfume, among other products.

What have relations between Saudi Arabia and France been like?

Sunday’s visit marked the third time MBS has visited France after trips in 2022 and 2023.

In December 2024, Macron visited Riyadh, where the two countries founded the Saudi-French Strategic Partnership Council, which formalised and upgraded political and economic ties between Saudi Arabia and France.

The current visit is also MBS’s first international trip since the August 7 signing of the Mecca Joint Defence Agreement, known as the Mecca pact – the mutual defence agreement between Saudi Arabia, Turkiye and Pakistan.

Signed by the prince, Turkiye’s President, Recep Tayyip Erdogan, and Pakistan’s Prime Minister, Shehbaz Sharif, the agreement commits all three states to treat an armed attack on any one of them as an attack on all three.

Analysts say the pact shows that Saudi Arabia is taking steps to diversify its security partnerships beyond Washington.

EXPLAINER

At least 145 countries have reported increases in petrol prices since the attacks on Iran by the US and Israel began on February 28.

Since the United States and Israel launched their war on Iran six months ago, petrol prices have risen in at least 145 countries, adding to the burden on consumers worldwide.

The figures are based on data from GlobalPetrolPrices, which tracks fuel prices in 170 countries and territories. Petrol prices in Myanmar rose the most, increasing by 56 percent from $0.77 per litre of 95-octane fuel on February 23 to $1.20 on August 17. Bhutan recorded the next-largest increase at 55 percent, followed by Cuba at 51 percent, the UAE at 50 percent and 48 percent in Nigeria.

In 25 other countries, most of them oil producers with heavily subsidised fuel, prices have either remained unchanged or fallen by single digits.

The table below lists the 145 countries where petrol prices at the pump increased over the past six months.

How higher fuel costs shrink your driving range

Before the war, the US national average for a gallon [3.78 litres] of regular petrol was $2.94. It now costs $4.09, an increase of 39 percent, according to AAA Fuel Prices, which tracks retail fuel prices for the American Automobile Association (AAA).

The extra cost directly affects how far people can travel. Before the war, $50 worth of fuel in the US could take a family sedan roughly 718 km (446 miles). Today, the same amount takes you about 536 km (333 miles) – 183 km less, a 25 percent reduction in driving distance.

That gap varies depending on where you live.

Set your country, car and budget below to see how far your money takes you. If you’re filling up in the US, you can also select a state and fuel grade.

How high oil costs drive up the price of food

Oil prices and food prices move in lockstep, with energy prices affecting every stage of the food supply chain, from the fertilisers used in the fields to the trucks that carry food from field to supermarket shelf.

Rising oil prices also directly impact shipping and the cost of transport.

“The lifeblood of the global economy is transport,” economist David McWilliams told Al Jazeera. “It’s getting stuff from A to B – it’s a logistics problem, a supply chain problem and ultimately transportation is the energy of the global economy.”

In lower-income countries, where populations spend a far greater share of their earnings on food and import large quantities of grain and fertiliser, rising oil prices could rapidly translate into food shortages.

What products are made from oil and gas?

Oil and gas are used for far more than just fuel. They are raw materials for thousands of everyday products.

Plastics, including water bottles, food packaging, phone casings and medical syringes, are all derived from crude oil.

Crude oil is also the hidden ingredient in synthetic fabrics, such as polyester, nylon and acrylic, which are used to make everything from sportswear to carpets. It also underpins the cosmetics industry, as it is used to make products such as petroleum jelly (Vaseline), lipsticks and concealers.

Household items also rely on oil-based ingredients, with laundry detergents, dishwashing liquids and paints all derived from petroleum products.

The global food supply is essentially built on natural gas in the form of fertilisers, used to enhance crop yields and ensure that food production can meet demand.

For the first time since becoming vice president of the United States, JD Vance has returned to his hometown of Middletown, Ohio, with a goal of rallying Republican voters ahead of November’s pivotal midterm elections.

Vance delivered Friday’s speech at a symbolic location: the steel plant where his late grandfather once worked.

He used the appearance to tout a $1bn investment from the steel manufacturer Cleveland-Cliffs that was supported by $500m in government awards.

That funding, he said, illustrated his party’s commitment to the manufacturing sector and reinvigorating the US economy overall.

“I’m not saying it’s going to be easy – or it’s all going to happen overnight – but in just 18 months, we have seen an explosion of rebuilding in the American heartland,” Vance said, crediting the growth to policies under President Donald Trump.

Vance’s speech comes at a critical time for the Republican Party and Trump in particular.

November’s midterm races will decide whether Republicans are able to maintain control over both chambers of Congress. Should their hold on the legislature slip, Democrats could stymie Trump’s policy priorities for the last two years of his presidency — or even impeach him, as Trump himself has suggested.

Polls have shown that the state of the economy remains the top issue ahead of the midterms.

But how voters perceive each party’s ability to address economic strain has shifted. Before the start of Trump’s second term, the Pew Research Center found that voters were more likely to favour Republican policies on the economy.

In July, however, the dynamic had switched: Thirty-seven percent of those surveyed backed the Democratic approach to the economy, compared with 36 percent for Republicans.

Another poll this month from the news agency Reuters and the firm Ipsos likewise found slightly more respondents siding with the Democrats on economic policy than Republicans, upending a longtime trend that stretched back to 2017.

Trump, for his part, has publicly appeared to dismiss cost-of-living issues as a partisan invention, calling questions of affordability a “hoax” and a “con job” engineered by Democrats.

At Friday’s speech, Vance took a different approach, trying to assuage concerns about the administration’s handling of the economy.

“We got a lot of work to do, but we’re making progress on all the things that matter the most,” Vance said, citing efforts to make homeownership more affordable.

The speech is part of an intensifying campaign under Trump to boost the prospects of Republican candidates ahead of the midterms, with the president and other top officials holding rallies for their party’s candidates.

Ohio, part of a historic manufacturing region known as the Rust Belt, has become increasingly conservative since Trump’s first White House victory in 2016.

But amid rising dissatisfaction with Republican leadership, Democrats see a chance to win back the state’s governor’s office, as well as the US Senate seat left vacant when Vance became vice president.

Whoever wins the special election in November will serve the remainder of Vance’s Senate term, which would have ended in January 2029.

The Republican nominee in the race, Senator Jon Husted, joined Vance on stage at the Middletown rally on Friday. Husted was appointed to fill Vance’s Senate seat until a special election could be held.

Vance, for his part, dedicated part of his speech to attacking Husted’s Democratic rival, former Senator Sherrod Brown, who lost his re-election race to Republican Bernie Moreno two years ago.

He accused Brown of being among the politicians “who pretend to be friends of the workers in this facility”, while instead advancing their own priorities.

“It’s hard to understand what these modern Democrats actually stand for,” Vance said, characterising the party as having strayed from its ideals.

He pointed to Brown’s record of siding with the policies of former Democratic President Joe Biden, who defeated Trump in the 2020 presidential race.

“[Brown] was a man who claimed to represent this state but never once raised his voice against Joe Biden’s border crisis or against the inflation that was brought on by Joe Biden underinvesting and trying to destroy American industry,” Vance said.

The vice president also singled out Michigan’s Abdul El-Sayed, repeating a false claim that the Democratic Senate candidate called for “Sharia law” in the US.

“I’d love to go back in time and tell my papaw that there’s a man who claims to stand for working people, who says not only should we have Sharia law, but if you criticise it, you are a white supremacist,” Vance said about El-Sayed.

Trump’s approval rating currently sits at 33 percent, according to Reuters-Ipsos polling from this month.

The El Nino weather phenomenon is expected to increase the likelihood of drought and excess heat across the region.

The Panama Canal is expected to limit traffic starting in early September, as it prepares for lower water levels due to the El Nino weather phenomenon.

On Thursday, the Panama Canal Authority, the body that oversees the waterway, announced that daily transit caps would be set to address concerns about the drier weather conditions ahead.

Under the new measures, 34 vessels will be permitted to sail through the canal as of September 4. A further reduction will start on September 15, when the limit will be 32 ships.

The travel restrictions are a reversal for the Panama Canal Authority. Officials told the news service Reuters in May that they had no plans to limit crossings this year, citing water conservation measures imposed last year.

The canal, which handles about 5 percent of global maritime trade, usually has capacity to accommodate about 40 vessels per day.  Since June, it has seen a daily average of 35 transits.

Any significant decrease in travel through the canal is likely to translate into slower international shipping for industries that rely on the waterway. That, in turn, could increase costs.

A severe drought in 2023, for instance, cut traffic through the Panama Canal by roughly 36 percent, leading to disruptions in global supply chains.

The declining water levels that year were also attributed to El Nino, as well as climate change accelerated by human activities.

El Nino is a naturally occurring weather phenomenon that takes place every two to seven years, when the eastern tropical Pacific Ocean is warmer than usual.

The resulting weather patterns can have an impact across the region and even globally, putting some areas at risk of excessive heat and drought, while others suffer from flooding

Scientists expect a particularly strong El Nino in the coming months, potentially among the strongest on record. That could lead to an increase in cases of extreme weather events.

Panama Canal authorities have previously imposed vessel limits in order to conserve water.

The canal relies on a lock system that lifts and lowers vessels as they travel from the Pacific Ocean to the Caribbean Sea, and vice versa.

But the canal is fed, in part, by freshwater from nearby lakes and reservoirs, most notably Gatun Lake.

Panamanians rely on that lake as well to supply drinking water to nearby cities, including the capital Panama City, putting additional strain on the waterway during times of drought.

Walmart sales are slumping as US consumer spending pulls back, with the economic impact of tariffs and the United States’ tensions with Iran weighing on consumers, the big-box retailer’s most recent earnings report shows.

US same-store sales rose 2.6 percent in the second quarter, according to the company’s earnings released on Thursday, falling short of the 3.8 percent forecast by analysts at LSEG. That marked the slowest quarterly increase in six years.

The Bentonville, Arkansas-based retailer said heightened petrol prices are to blame for the slowdown in spending.

“When fuel prices increase and get above $4, perhaps there’s a psychological impact to that … consumers are making trade-offs,” CFO John David Rainey said on a call with analysts on Thursday.

Prices are continuing to jump. The average price for a gallon (3.78 litres) of petrol rose to $4.10 on Thursday, up from $4.07 a week ago, according to the American Automobile Association, which tracks daily petrol prices. By comparison, the average price was $2.98 when the US and Israel first struck Iran.

The big-box retailer also said it expected $2bn in incremental fuel-related costs above its original guidance.

Sales dropped in Walmart’s US pharmacy business and also dipped elsewhere. Overall, quarterly revenue rose 3.4 percent, the slowest pace since the first quarter of fiscal 2023.

Consumers are spending more in the checkout line — 1.1 percent higher than the previous quarter — but it is still well below the 3.1 percent jump this time last year.

That comes as consumer inflation ticked up last month by 0.1 percent from the month prior and 3.4 percent from this time last year, according to the US Labor Department’s Bureau of Labor Statistics (BLS).

The price of fresh fruit jumped 2.2 percent from a month ago, butter by 0.8 percent, and fresh fish by 1 percent, according to the BLS report.

This as overall retail sales dipped in July, dropping 0.6 percent, marking the biggest decrease since May 2025, according to the US Commerce Department data released last week.

Walmart also announced price cuts on Wednesday on 11,000 items, to be fuelled in part by the $2.9bn in tariff refunds it has received – a one-time boon – and a strategy also being deployed by rivals including Target.

Walmart said, however, that price changes took effect in July, so the effects might be more apparent in the company’s next earnings report.

“You don’t necessarily expect to have that offsetting benefit to the lower prices in the immediate period,” Rainey said.

However, fewer consumers are venturing into brick-and-mortar stores, with foot traffic increasing by 1.5 percent for the quarter, a drop from 3 percent in the previous quarter. However, Walmart’s e-commerce sales are on the upswing, with sales jumping 24 percent in the US.

As a result, Walmart upgraded its forecast for net sales growth, from 3.5–4.5 percent to 4–5 percent.

But that is limited because in-store sales are still the company’s premier offering.

“The bread and butter of the company is still in-store and in-person shopping,” Melius Research analyst Jacob Aiken-Phillips told the Reuters News Agency.

Mixed big-box earnings

Other big-box retailers also reported earnings in the last couple of days, with a pullback in consumer spending being an undertone. TJX, the parent company of TJ Maxx and Marshalls, reported sales growth of 1 percent for the quarter, a slowdown from 6 percent the quarter before.

“Our fear is that it relates to lower ticket [less purchases per shopping trip] given wider signs of consumer weakness and price increases over the last year-and-a-half,” William Blair analyst Dylan Carden told Reuters.

That comes alongside earnings from Target, one of Walmart’s closest competitors. On Wednesday, the Minneapolis, Minnesota-based big-box retailer reported net sales jumping 5.3 percent for the quarter compared to this time last year, at $26.5bn.

That was driven by a 3.6 percent rise in in-store traffic. The company has also cut prices over the last year on more than 10,000 items and received a $1bn tariff refund.

On Wall Street, Walmart is taking a hit on the heels of its earnings report, with shares down by 9.6 percent since the market opened. Other big-box retailers are lower, but not showing nearly as stark a drop. TJX stock was down 1.7 percent, and Target was down by 0.1 percent.

Social media giant Meta is facing a landmark trial that could impact its future.

Opening statements began on Tuesday in a US federal court case brought by 29 state attorneys general, who have accused Facebook and Instagram’s parent company of designing platforms to encourage infinite scrolling and keep their youngest users hooked, despite allegedly knowing they could fuel addictive behaviour. The company is also accused of collecting data on minors.

The case is expected to last as long as six weeks. If the attorneys general get their way, the Silicon Valley-based tech company might have to make structural changes to its platform and pay as much as $1.4 trillion in fines.

While Meta denies the allegations, the potential consequences of this case could be significant for the company, which is already facing low employee morale, waves of layoffs and a series of lagging investments.

Significant financial impact

The potential exposure to Meta is significant. State penalties could reach as high as $1.4 trillion, Meta has said, although that is unlikely, as the coalition of states said it is seeking $200bn in damages.

To put that in context, the amount is roughly the equivalent of Meta’s revenue last year. In 2025, the tech giant generated nearly $201bn in revenue, and it had $83.2bn in operating income.

The $200bn ask is significantly higher than any penalty the company has had to face so far. In March, a jury in a separate New Mexico lawsuit ordered Meta to pay $375m in civil penalties, and another $567m was ordered by a judge earlier this month.

At the time of the March penalty, financial services firm Morningstar said it was not overly concerned about the impact of the looming court cases on Meta’s valuation, even if governments around the world use these cases as a reason to push for structural changes to the business.

“We think that any algorithmic changes imposed on the firm via legislation are also a manageable risk, given the firm’s monetizable user base, which is overwhelmingly adult, thereby insulating the firm against such legislation,” a Morningstar analyst note said.

While no one can predict which way the coalition case will go, Meta’s problems extend to concerns about significant financial exposure in some of its investments and business units.

For instance, Reality Labs, the division responsible for Meta’s virtual and augmented reality tools and software like the metaverse, has lost $70bn since 2020.

Meta has also ramped up spending to build out AI infrastructure as growing concerns about an AI bubble loom over the sector.

Cash flow for the business fell significantly, from $12bn in the first quarter to $784m in the second quarter, although it did not go into negative territory as some analysts had expected.

“I think it’s [Meta] in an unenviable spot, because it’s facing pressure from multiple fronts,” Aleksandar Tomic, associate dean for strategy, innovation, and technology at Boston College, told Al Jazeera.

“These verdicts are going to put pressure on their advertising business. The AI development seems to have stalled, and the virtual reality thing seems to be dead on arrival, at least for now. So the only bright spot is that they might be able to get into the AI infrastructure game, but that is no guarantee.”

Meta itself is worried about the financial strain. “There can be no assurances that a favorable final outcome will be obtained in all our cases, and defending any lawsuit is costly and can impose a significant burden on management and employees,” the company said in a January Securities and Exchange Commission (SEC) filing.

Can the lawsuit impact its core product?

While financial penalties might be a strain, a legal requirement to fundamentally alter the machinery that makes Instagram and Facebook so valuable to advertisers would be much harder for Meta to absorb.

The lawsuit calls for changes to its business model, including eliminating the infinite scroll that allows users to continually look at new posts. Meta’s advertising business is dependent on impressions, or the number of times a content appears on a user’s screen. The longer someone is on the app, the more impressions they can see.

“Our financial performance has been and will continue to be significantly determined by our success in adding, retaining, and engaging active users of our products that deliver ad impressions, particularly for Facebook and Instagram,” the company said in an SEC filing.

“User growth and engagement are also impacted by a number of other factors, including competitive products and services, such as TikTok, that have reduced some users’ engagement with our products and services,” the filing added.

In 2025, Meta reported 12 percent more advertisement impressions than in 2024, while the average price per advertisement jumped by 9 percent.

The plaintiff states want the company to make other changes, including getting rid of algorithms and AI models made from data compiled from minors. The states are also asking the court to compel the company to promote the wellbeing of its users and set time restrictions for its youngest consumers.

Meta has introduced features that have reminded teens of their time use on their platforms. In January 2023, it gave teens ways to manage the kinds of advertisements they could see on Instagram and Facebook. In June 2023, it introduced a feature to notify teen users that they have spent more than 20 minutes on the platform and to set daily time limits.

“We stand by our record of creating strong protections for teens, and look forward to making our case in court,” Stephanie Otway, a Meta spokesperson, told Al Jazeera.

But the lawsuit says that is not enough, alleging that teens could easily dismiss the notification and continue scrolling.

How will this impact future lawsuits?

Meta is currently facing lawsuits from more than 100,000 different parties, according to its SEC filings, including individuals, cities, states, and school districts around the US.

“These first few cases going out are really going to set the standard,” Tre Lovell, a Los Angeles-based media law and entertainment lawyer, told Al Jazeera.

Lovell predicted that, ultimately, there will be a combined settlement.

“We’re going to get close to some type of global settlement, a global resolution. I think, ultimately, that’s where this is going to end.”

Snap, TikTok, and Google’s YouTube have also faced litigation amid allegations that their products are built to encourage compulsive use by young people, Tomic told Al Jazeera. The claims could open the floodgates to the type of litigation that challenged the tobacco industry in the late 1990s, he said.

“This is the tobacco litigation of the information age. They [the plaintiffs in the Meta lawsuit] have identified this addiction component of social networks. Now that there is a judgement against Meta, I would be shocked if we don’t see everybody else getting sued, and once they get sued, it will be pretty much the same,” Tomic said.

In 1998, 46 states settled lawsuits with major cigarette makers over health costs and forced the companies to impose restrictions on advertising, especially targeting younger audiences.

BREAKINGBREAKING,

Trump announces pause on 50 percent duty on Canadian exports shortly before midnight deadline.

The United States and Canada have reached a deal to avert steep tariffs on billions of dollars of Canadian goods, US President Donald Trump has announced.

Trump made the announcement shortly before the expiry of a midnight deadline for imposing a 50 percent duty on a wide range of Canadian exports, including electronics, industrial machinery, furniture, and dairy products.

“I have paused the 50% Tariffs against Canada, that were scheduled to kick in tomorrow morning for a three day period, based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!” Trump wrote in a post on Truth Social.

“The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!”

More to follow…

Opening statements in a landmark US case brought by a bipartisan coalition of 29 states against Meta – the parent company of Facebook and Instagram – began on Tuesday, with Colorado, California, New Jersey and Kentucky arguing that the company’s popular social media apps were designed in ways that harmed the mental health of young users.

The trial, which is expected to last several weeks, began in a US federal court in California before District Judge Yvonne Gonzalez Rogers. While there is an eight-person jury, the group is serving in an advisory role as Judge Rogers will ultimately decide the case.

Megan O’Neill, a deputy California attorney general, in her opening statement said that the company designed its products to “hook the users, hold them for as long as they can, harvest their data, and then hide the truth from the public”.

She added that it worked “especially well for kids”.

The lawsuit, which was first filed in 2023, alleges that Meta made decisions to design its apps to hook users and facilitate excessive use among the platforms’ youngest users. The coalition also alleges that the company collected data on children under the age of 13 in violation of federal law.

“Meta needed kids, and it needed to reassure the people who cared about those kids that the kids are safe,” O’Neill said.

‘Limited claims’

Meta has long pushed back on allegations against the Silicon Valley social media behemoth.

In a statement before the trial, a Meta spokesperson said the states’ claims are unsubstantiated, and the company stands by its record of creating strong protections for teenagers, including launching Instagram Teen Accounts in 2024, which limit who can contact underage users, as well as a feature that allows parents to set time limits on usage.

“The State AGs may call this a landmark case, but their limited claims are unsubstantiated and their financial demands are vastly disproportionate,” Stephanie Otway, a Meta spokesperson, told Al Jazeera in a statement.

“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. Rather than sticking to the facts or the law, the states have instead decided to chase an outlandish payout.”

The potential impact on Meta’s bottom line is existential. The company could face fines as high as $1.4 trillion, which is just shy of its $1.5 trillion market cap. However, the coalition is seeking fines of roughly $200bn.

Meta has already been ordered to pay $942m in fines in a separate New Mexico lawsuit – $375m in civil penalties in a March jury verdict and $567m ordered by a judge earlier this month.

Meta has acknowledged that the lawsuits it faces, including those related to youth social media addiction, could lead to “substantial monetary damages or fines” in a Securities and Exchange Commission filing in January.

A long time coming

Meta, along with other social media giants, has faced a growing slate of cases across the United States, including from cities, states, school districts and even individuals.

The coalition of states is asking Meta to make changes to its platforms, including introducing new age restrictions and cutting the infinite scroll.

The case’s impetus came from a US Senate committee hearing in 2021, when whistleblower Frances Haugen, a former data scientist at Facebook, claimed that the company knowingly pushed products that could impact the health of young users as the Mark Zuckerberg-led company pursued higher profits.

Meta has repeatedly tried to end the coalition lawsuit, including in 2024 and as recently as June, when it sought summary judgement – a decision that a court might make without going to trial – which would have ended the lawsuit.

The case is impacting the company’s stock. On Wall Street, the social media giant is down more than 3 percent in midday trading.

FCC faces scrutiny as Disney claims licence renewal order is tied to political motives against ABC’s coverage.

Disney has filed a lawsuit against the Federal Communications Commission (FCC) amid efforts to stop an early licence review for eight ABC-owned and -operated stations around the United States.

In the lawsuit filed in a federal court in Washington, DC, the media giant alleged the early renewal is an effort by the administration of US President Donald Trump to intimidate the company after infuriating the president.

In April, the FCC ordered the network’s stations, which include its affiliates in New York and Los Angeles, to file their licence renewals ahead of schedule despite the fact that for six of its stations, the current term isn’t even halfway finished. The station with the closest deadline is WTVD in Durham, North Carolina, but that is not until December 2028. The network says the move is part of a political “retaliatory campaign”.

“Again and again, the Administration has attacked ABC’s speech – the stories its journalists report and the viewpoints its network programs air. Over time, those attacks have escalated into express demands that ABC be stripped of its broadcast licenses because of its speech,” the 46-page complaint said.

The suit presented a wave of Truth Social posts that the president posted in 2025 threatening the network, among them one saying that the network “should lose their Licences for their unfair coverage of Republicans and/or Conservatives”.

The FCC said the April licence renewal call was a result of diversity, equity and inclusion practices at ABC’s parent company, Disney, and an investigation into the ABC network’s talk show programme The View.

In March, FCC Chairman Brendan Carr threatened broadcasters, saying stations airing “fake news” could lose their licences amid Trump’s frustration with coverage of the US-Israel war on Iran.

Not long after, Trump demanded that ABC fire late-night host Jimmy Kimmel over comments he made before the White House correspondents dinner shooting in which he called first lady Melania Trump an “expectant widow”. Trump responded to them after the shooting, characterising them “a call to violence”.

Free speech advocates have praised ABC for the lawsuit.

“It’s about time for someone to take Brendan Carr and his FCC to court over their endless campaign of intimidation and retaliation against journalism that displeases Carr’s thin-skinned boss,” Seth Stern, director of advocacy at the Freedom of the Press Foundation, told Al Jazeera.

“No matter what pretexts he asserts, Carr’s modus operandi is clear: to serve as Trump’s censorship tsar and abuse his office to repeatedly and exclusively target Trump’s perceived adversaries in the media, whether through sham proceedings or threatening letters and X posts.”

The network called for a “speedy hearing” in the complaint as well as a temporary restraining order.

News of the lawsuit sent Disney’s stock surging in morning trading by 1.1 percent.