Meta Faces $1.4T Youth-Safety Trial, OpenAI Losses Widen, Ellison Threatens Paramount Move
On August 18, 2026, a youth-safety trial commenced in Oakland, overseen by Judge Yvonne Gonzalez Rogers, posing a major legal challenge for Meta Platforms. A coalition of 29 state attorneys general has filed a consolidated lawsuit seeking penalties that could reach up to $1.4 trillion, although a more probable figure is $200 billion. The states allege that Meta employs addictive design strategies detrimental to children, with internal documents indicating a strategy aimed at keeping young users engaged. Additionally, Meta is contending with over 3,000 similar lawsuits across California and 14 other states. In other news, OpenAI reported a revenue increase of 18% in Q2, totaling $6.7 billion, while its losses expanded to $12.3 billion. In the entertainment sector, David Ellison, CEO of Paramount Skydance, warned of a potential move unless California resolves an antitrust case by October 1.
Key facts
- Meta's youth-safety trial began August 18, 2026, in Oakland federal court before Judge Yvonne Gonzalez Rogers.
- 29 state attorneys general seek up to $1.4 trillion in penalties from Meta, with $200 billion cited as more likely.
- California, Colorado, Kentucky, and New Jersey accuse Meta of using addictive designs to harm children.
- Internal Meta analysis found tweens had roughly 3x higher long-term retention than adults, favoring tween targeting.
- An internal communication compared Meta's approach to tobacco marketing with a 'hook ’em young' sentiment.
- Meta has over 3,000 similar lawsuits pending in California state court.
- OpenAI's Q2 revenue grew only 18% to $6.7 billion, while losses increased $3 billion to $12.3 billion.
- OpenAI COO Brad Lightcap and CRO Denise Dresser left the company; Dresser departed after eight months.
- Wells Fargo's Michael Turrin projects OpenAI will contribute $10 billion to Oracle FY2027 revenue, rising to $39 billion in FY2028.
- David Ellison threatened to move Paramount Skydance from California by October 1 unless AG Rob Bonta settles the merger suit.
- A report estimates the Paramount-Warner Bros. Discovery merger could cost 4,500 film/TV jobs in Los Angeles County.
Entities
Artists
- Mark Zuckerberg
- Sam Altman
- Larry Ellison
- David Ellison
- Megan O'Neill
- Yvonne Gonzalez Rogers
- Eric Goldman
- Gary Marcus
- Ed Zitron
- Brad Lightcap
- Denise Dresser
- Michael Turrin
- Matt Belloni
- Rob Bonta
- Xavier Becerra
- Gavin Newsom
- Elizabeth Warren
- Sumner Redstone
Institutions
- Meta Platforms
- OpenAI
- Oracle
- Paramount
- Paramount Skydance
- Warner Bros. Discovery
- WarnerMount
- YouTube
- Snap
- TikTok
- Federal Trade Commission
- State of California
- State of Colorado
- Commonwealth of Kentucky
- State of New Jersey
- State of Tennessee
- State of Texas
- State of Georgia
- State of New Mexico
- Wells Fargo
- Santa Clara University School of Law
- Writers Guild
- Cinema United
- National Association of Theatre Owners
- American Economic Liberties Project
- Netflix
- A24
- Lionsgate
- Amazon MGM
- CNN
- Disney
- Microsoft
- Amazon
- SoftBank
- Bloomberg
- The New York Times
- The Wall Street Journal
- Financial Times
- CNBC
- Puck
- Gizmodo
- Inc.
- Reuters
Locations
- Oakland
- United States
- California
- Colorado
- Kentucky
- New Jersey
- Tennessee
- Texas
- Georgia
- Hollywood
- Los Angeles
- Los Angeles County
- Melrose Avenue
- Nashville
- Southern California
- New Mexico
- U.S.