In 1994, more than 40 US states ganged up to sue one of the most powerful industries on Earth: big tobacco. The suits, centered on misleading advertising and a mounting public health crisis, ended in a settlement where the companies agreed to pay more than any industry ever, and the states agreed to drop a large chunk of their claims. Thirty years later, smoking is thriving in the developing world, the companies remain profitable, and the global tobacco market is worth nearly $1tn. Now, history is repeating - with a slightly more pixelated villain.

On Tuesday, a major trial began against Meta, where 29 states claim the parent of Facebook and Instagram designed a deliberately addictive product and aimed it at children. This follows a bellwether case earlier this year, where a Los Angeles jury found the social media company - and YouTube, its co-defendant - liable for designing an addictive product that messed with the mental health of one young claimant. That case awarded $6m and pried open the litigation floodgates. Around the same time, Meta shelled out $942m in a separate New Mexico trial over child sexual exploitation on its platforms.

This new wave focuses less on exploitation and more on the algorithm that decides what users see. Kate Winick, an analyst at Forrester, called the trial “potentially the end of social media as we know it,” though a ruling against Meta wouldn't kill the industry, just “significantly reduce usage over the long term.” The damages sought are eye-watering: attorneys general want $200bn - roughly Meta's annual revenue. Meta claims the figure could hit $1.4tn, nearly its market cap, which the judge called “unreasonable.”

But the real threat might be forced changes to Meta's dopamine-manipulating recommender algorithm, which fuels engagement by showing inflammatory posts. That's the engine of its ad business. Steven Murdoch, a professor at University College London, said changes could reduce engagement and ad opportunities, but he's not convinced the asks will be devastating. “There’s a plausible path” for global changes, he said, but “whether it’s devastating or not - I'm not convinced.”

History offers a cautionary tale. Google faced a landmark antitrust suit in 2023 that could have broken it up, but despite losing, got a “slap on the wrist” and remains a juggernaut. “I don’t think anyone really wants to destroy Facebook,” Murdoch said. Meta's spokesperson called the claims “unsubstantiated” and the demands “vastly disproportionate,” adding, “We stand by our record of creating strong protections for teens.”

And big tobacco? The US sought $289bn from Philip Morris and co., but the final demand was slashed to $14bn over 10 years - less than 5% of the original. Philip Morris kept puffing, forced only to admit smoking harms and tweak its marketing. Its revenues hover around $40bn a year, lower than two decades ago but steadily rising. So will Meta get singed or just lightly toasted? Stay tuned.