As a multinational company with a complex and evolving business, we are, and expect to continue to be, subject to numerous claims, litigation, regulatory, tax, and government inquiries and investigations, and other legal proceedings in jurisdictions around the world. Although we believe many of these matters are without merit and are vigorously defending them, we may not be successful. Any litigation to which we are a party may be resolved adversely or we may be subject to an unfavorable judgment that may not be reversed upon appeal. We may also decide to settle litigation, disputes, or other legal proceedings in some instances on terms that are unfavorable to us. In addition, we may become subject to orders or consent decrees imposed by government or regulatory authorities. Any such developments could cause us to incur substantial costs, expose us to civil and criminal liability (including liability for our personnel) or penalties (including substantial monetary remedies), interrupt or require us to change our business practices in a manner materially adverse to our business (including changes to our products and services or user data practices), result in negative publicity and reputational harm, divert resources and the time and attention of management from our business, or subject us to other structural or behavioral remedies that adversely affect our business. We have experienced such outcomes to varying degrees in the past, and we expect to continue to face a challenging litigation and regulatory environment, including in light of complex and evolving laws and regulations, as well as the scale of our business and the size of our user and advertiser base. Over the last several years, the number and potential significance of the litigation and investigations involving the company have increased, and there can be no assurance that this trend will not continue. For example, we are facing numerous cases in the United States in which plaintiffs are attempting to avoid or limit the application of Section 230 of the Communications Decency Act to their claims and certain of those matters have survived motions to dismiss, including through the use of products liability and/or breach of contract theories. Outside of the United States, courts are also limiting the application of intermediary liability protections in certain claims. In addition, we are subject to relatively new regulatory regimes outside of the United States, including the Digital Services Act, Digital Markets Act, EU AI Act and similar statutes in non-EU countries such as the UK Digital Markets, Competition and Consumer Act, and new fining guidelines under existing regulatory regimes like the General Data Protection Regulation (GDPR). We are facing inquiries and investigations regarding various aspects of our regulatory compliance, as well as private litigation in Europe, including class and mass actions, claiming damages (including for loss of control of data without other damage) and/or injunctions in respect of alleged failings to comply with such regulatory requirements. We are also responding to litigation and government investigations related to our alleged role in causing or contributing to various societal harms, including mental and physical health and safety impacts on users, particularly younger users, child and adult sexual exploitation, illegal activity with respect to drugs, fraud, unlawful discrimination, and other harms potentially impacting large numbers of people. This is in addition to significant tax, competition and antitrust, stockholder, commercial, consumer, intellectual property, and privacy litigation and investigations. Furthermore, as the number of our users and amount of our revenue have grown, our potential exposure to substantial damages awards and fines has increased, including through class action litigations and other legal proceedings under statutory regimes permitting penalties or damages on a per-violation basis or based on a percentage of global revenue. The maximum aggregate monetary damages or penalties sought across our various legal proceedings could amount to an aggregate of up to hundreds of billions of dollars and, as a result, could be material to the financial condition of the company. In some instances, particularly with novel legal and factual claims, new regulatory regimes or statutes that have not previously been enforced, or where the nature or type of enforcement pursued against us is novel, it can be very difficult to assess the likelihood or extent of potential liabilities, including the nature and extent of injunctive or other non-monetary relief and the applicability and amount of any potential forfeitures, disgorgement, fines or penalties. We have identified below certain significant matters, some of which may be material. There can be no assurance that additional material losses or limitations on our activities will not result from claims that have not yet been asserted or are not yet determined to be material. Privacy and Related Matters Beginning on March 20, 2018, multiple putative class actions were filed in state and federal courts in the United States and elsewhere against us and certain of our directors and officers alleging various causes of action in connection with our platform and user data practices as well as the misuse of certain data by a developer that shared such data with third parties in violation of our terms and policies, and seeking unspecified damages and injunctive relief. With respect to the putative class actions alleging fraud and violations of consumer protection, privacy, and other laws in connection with the same matters, 50 Table of Contents several of the cases brought on behalf of consumers in the United States were consolidated in the U.S. District Court for the Northern District of California (In re Facebook, Inc., Consumer Privacy User Profile Litigation). On December 22, 2022, the parties entered into a settlement agreement to resolve the lawsuit, which provided for a payment of $725 million by us and became final on May 14, 2025. In addition, our platform and user data practices, as well as the events surrounding the misuse of certain data by a developer, became the subject of U.S. Federal Trade Commission (FTC), state attorneys general, and other government inquiries in the United States, Europe, and other jurisdictions. We entered into a settlement and modified consent order to resolve the FTC inquiry, which took effect in April 2020 and required us to pay a penalty of $5.0 billion and to significantly enhance our practices and processes for privacy compliance and oversight. In addition, in December 2025, we entered into a settlement agreement with California to resolve its lawsuit alleging violations of consumer protection laws, which was approved by the court in California in March 2026. Certain other state attorneys general inquiries and litigation and certain government inquiries in other jurisdictions remain ongoing and could subject us to additional substantial fines and costs, require us to change our business practices, divert resources and the attention of management from our business, or adversely affect our business. On June 1, 2023, the court presiding over the lawsuit filed by the District of Columbia granted our motion for summary judgment, resolving the case in our favor. On June 29, 2023, the District of Columbia filed a notice of appeal. The appeal was heard on January 30, 2025 and on July 31, 2025, the District of Columbia Court of Appeals reversed the decision on procedural grounds and remanded the matter to the lower court. Trial in the New Mexico Attorney General's case, which has expanded to include various claims related to content moderation issues, is scheduled to begin on September 8, 2026. The New Mexico Attorney General has indicated that they intend to seek up to $62.85 billion in penalties in this case. On May 3, 2023, the FTC filed a public administrative proceeding (In the Matter of Facebook, Inc.) seeking substantial changes to the modified consent order, which took effect in April 2020 after its entry by the U.S. District Court for the District of Columbia. The changes sought by the FTC are set forth in a proposed order and include, among others, a prohibition on our use of minors' data for any commercial purposes, changes to the composition of our board of directors, and significant limitations on our ability to modify and launch new products. On May 31, 2023, we filed a motion before the U.S. District Court for the District of Columbia seeking to enjoin the FTC from further pursuing its agency process to modify the modified consent order. On November 27, 2023, the district court denied our motion, and we then appealed to the U.S. Court of Appeals for the District of Columbia Circuit (U.S. v. Facebook, Inc.) and sought to stay the FTC proceeding pending resolution of the appeal. Our motion for a stay pending appeal was denied in March 2024. After the underlying appeal was briefed and oral argument was held on November 5, 2024, the U.S. Court of Appeals for the District of Columbia Circuit issued its decision on May 16, 2025, reversing the district court's denial of our motion on jurisdictional grounds, and directed the district court to consider the merits of our arguments. On July 10, 2025, the case was remanded to the district court to consider our claims in light of the Court of Appeals' determination that the district court retains jurisdiction over the entirety of the consent order. On December 23, 2025, the district court ordered a schedule for supplemental briefing in light of the Court of Appeals decision, and briefing was completed in May 2026. On November 29, 2023, we separately filed a complaint, also in the U.S. District Court for the District of Columbia (Meta Platforms, Inc. v. FTC), asserting constitutional challenges to the structure of the FTC, and seeking to preliminarily enjoin the FTC proceeding during the pendency of the litigation. On December 13, 2023, the FTC filed an opposition to our motion for preliminary injunction and a motion to dismiss the complaint. On March 14, 2024, the district court denied our motion to preliminarily enjoin the FTC proceeding during the pendency of the litigation, and also denied the FTC's motion to dismiss our complaint without prejudice, pending the U.S. Supreme Court's decision in SEC v. Jarkesy (Jarkesy). Our motion for a stay of the FTC proceeding pending appeal was denied in March 2024. Both the district court action and the appeal were stayed pending the Supreme Court's decision in Jarkesy. Following the Supreme Court's ruling in Jarkesy on June 27, 2024, the government filed a renewed motion to dismiss, which was fully briefed as of October 18, 2024. On June 29, 2025, the district court granted our request for a stay in light of the Court of Appeals' May 16, 2025 decision in the jurisdictional case. On June 9, 2026, the district court continued the stay and ordered the parties to file a status update due the earlier of 30 days after a decision in the jurisdictional case, or September 8, 2026. On April 1, 2024, we filed our response to the FTC's Order to Show Cause, arguing, among other things, that the Order to Show Cause proceeding was legally improper. Per FTC orders, we completed briefing on threshold legal issues on July 18, 2024, and the FTC held oral argument before the Commissioners on those issues on November 12, 2024. On January 10, 2025, the Commission issued a decision on certain threshold legal issues, including that the Commission has statutory authority to modify consent orders. The Commission stated that its decision is subject to Meta's jurisdictional challenges then pending before the U.S. Court of Appeals for the District of Columbia Circuit in U.S. v. Facebook, Inc., and that the nature and scope of any further administrative proceedings would be addressed at a later date. On July 30, 2025, the Commission issued an order staying the Order to Show Cause proceeding pending final resolution of the two judicial cases we filed 51 Table of Contents challenging the proceeding. Through the administrative process, the FTC could amend the order to impose the additional requirements set forth in the proposed order. We should have the opportunity to appeal an FTC decision modifying the order and could request the appellate court to stay the enforcement of the modifications to the order while the appeal is pending. It is unclear whether the appeal or the request for a stay would be successful. We also notify the Irish Data Protection Commission (IDPC), our lead European Union privacy regulator under the GDPR, of certain other personal data breaches and privacy issues, issue similar notifications to European regulators under other laws (such as UK GDPR and Member State implementations of the ePrivacy Directive), and are subject to inquiries and investigations by the IDPC and other European regulators regarding various aspects of our regulatory compliance. For example, the IDPC is continuing to assess the compliance of our "subscription for no ads" consent model with requirements under the GDPR. In addition, on May 12, 2023, the IDPC issued a Final Decision concluding that Meta Platforms Ireland's reliance on Standard Contractual Clauses in respect of certain transfers of European Economic Area (EEA) Facebook user data was not in compliance with the GDPR. The IDPC issued an administrative fine of EUR €1.2 billion as well as corrective orders requiring Meta Platforms Ireland to suspend the relevant transfers and to bring its processing operations into compliance with Chapter V GDPR by ceasing the unlawful processing, including storage, of such data in the United States. We are appealing this Final Decision and it is currently subject to a stay from the Irish High Court. We have also implemented steps to comply with the above corrective orders and are pending the IDPC's confirmation that these address the corrective orders. For additional information, see Part II, Item 1A, "Risk Factors—Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data use, data combination, data protection, content, AI, competition, youth, safety, consumer protection, advertising, e-commerce, and other matters" in this Quarterly Report on Form 10‑Q. Any such inquiries or investigations (including the IDPC proceedings) could subject us to substantial fines and costs, require us to change our business practices, divert resources and the attention of management from our business, lead to additional claims from users, or adversely affect our business. In addition, we are subject to individual and class actions in Europe relating to matters that are or have been the subject of regulatory investigations. Beginning on June 7, 2021, multiple putative class actions were filed against us alleging that we improperly received individuals' information from third-party websites or apps via our business tools in violation of our terms and various state and federal laws and seeking unspecified damages and injunctive relief (for example, In re Meta Pixel Healthcare Litigation; In re Meta Pixel Tax Filing Cases; Frasco v. Flo Health, Inc.; Doe v. Hey Favor, Inc. et al.; Doe v. GoodRx Holdings, Inc. et al. in the U.S. District Court for the Northern District of California; and Rickwalder, et al. v. Meta Platforms, Inc. in the Santa Clara County Superior Court). These cases are in different stages, but several of our motions to dismiss have been denied in whole or in part, while certain others have been granted in whole or in part. In Rickwalder, the Superior Court denied plaintiffs' motion for class certification and the plaintiffs have appealed that decision. In Meta Pixel Tax Filing Cases, on March 30, 2026, the U.S. District Court for the Northern District of California denied plaintiffs' motion for class certification. In Flo Health, on August 1, 2025, a jury returned a verdict on liability in favor of the plaintiffs and on behalf of a California subclass on the sole claim remaining against Meta under Section 632 of the California Invasion of Privacy Act. Plaintiffs are seeking $5,000 in statutory damages per class member and have asserted that there are up to approximately 1.25 million class members. The amount of potential damages is uncertain at this time. In addition, we are subject to individual and class actions in Europe and Canada, as well as regulatory investigations in the United States, Europe, and elsewhere, relating to similar matters with regard to our business tools. Competition We are subject to various litigation and government inquiries and investigations, formal or informal, by competition authorities in the United States, Europe, and other jurisdictions. Such investigations, inquiries, and lawsuits concern, among other things, our business practices in the areas of social networking or social media services, digital advertising, and/or mobile or online applications, as well as our acquisitions. For example, in 2019 we became the subject of antitrust investigations by the FTC and U.S. Department of Justice. On December 9, 2020, the FTC filed a complaint (FTC v. Meta Platforms, Inc.) against us in the U.S. District Court for the District of Columbia alleging that we engaged in anticompetitive conduct and unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act and Section 2 of the Sherman Act, including by acquiring Instagram in 2012 and WhatsApp in 2014 and by maintaining conditions on access to our platform. The FTC sought a permanent injunction against our company's alleged violations of the antitrust laws, and other equitable relief, including divestiture or reconstruction of Instagram and WhatsApp. On June 28, 2021, the court granted our motion to dismiss the complaint filed by the FTC with leave to amend. On August 19, 2021, the FTC filed an amended complaint, and on October 4, 2021, we filed a motion to dismiss this amended complaint. On January 11, 2022, the court denied our motion to dismiss the FTC's amended complaint. On April 5, 2024, we filed our motion for summary judgment and the FTC filed its opposition and its own motion for partial summary judgment on May 24, 2024. On November 52 Table of Contents 13, 2024, the court granted in part and denied in part both our and the FTC's motions for summary judgment. Trial began on April 14, 2025 and concluded on May 27, 2025. On November 18, 2025, the court granted judgment in our favor. On January 20, 2026, the FTC filed a notice of appeal of that ruling. Multiple putative class actions have also been filed in state and federal courts in the United States and in the United Kingdom against us alleging violations of antitrust laws and other causes of action in connection with these acquisitions and/or other alleged anticompetitive conduct, and seeking damages and injunctive relief. Several of the cases brought on behalf of certain advertisers and users in the United States were consolidated in the U.S. District Court for the Northern District of California (Klein et al., v. Meta Platforms, Inc.). On December 30, 2024, we filed our motion for summary judgment in the putative class action brought on behalf of certain advertisers, which is pending with the court. On January 24, 2025, the court denied plaintiffs' motion for class certification in the action brought on behalf of users, permitting it to proceed only on an individual basis as to the named plaintiffs. On September 29, 2025, in the user action, the court granted our motion, entering judgment in our favor. On October 27, 2025, plaintiffs in the user action filed a notice of appeal. On February 11, 2022, a putative class action was filed against us in the UK Competition Appeals Tribunal (CAT) under the UK collective proceedings regime (Lovdahl-Gormsen v. Meta Platforms, Inc. et al.). On October 6, 2023, following the denial of class certification, the class representative submitted an amended claim alleging abuse of dominance relating to aspects of our data processing practices and seeking damages. The CAT certified the amended claim on February 15, 2024. Trial is scheduled to begin in October 2028. We are also subject to litigation in Europe brought by news and media companies alleging anticompetitive conduct in relation to aspects of our historic data processing practices. For example, on December 1, 2023, 87 news media companies filed a joint action against us in Spain in relation to our legal basis under the GDPR for behavioral advertising, alleging unfair competition and abuse of dominance (Asociacion de Medios de Informacion (AMI) v. Meta Ireland). On November 19, 2025, the court issued judgment against us, finding that AMI had failed to establish abuse of dominance but upholding its case on unfair competition and awarding damages of approximately EUR €542 million. We have appealed the decision. In addition, on October 24, 2024, ten radio and television publishers commenced a separate claim against us in Spain on the same basis (Union de Televisiones Comerciales Asociadas (UTECA) v. Meta Ireland). Trial is scheduled for October 2026. In addition, on April 29, 2025, a similar unfair competition claim was filed against us by 67 media companies in France, with an additional 34 plaintiffs intervening subsequently (Amaury et al. v. Meta Platforms Ireland Limited). Trial is expected to take place in 2027. In December 2022, the European Commission issued a Statement of Objections alleging that we tie Facebook Marketplace to Facebook and use data in a manner that infringes European Union competition rules. On November 18, 2024, the European Commission issued a decision that Meta infringed Article 102 on the Treaty of the Functioning of the European Union in relation to certain alleged business practices relating to Facebook Marketplace and imposed a fine of approximately EUR €798 million. We appealed the European Commission's decision on January 28, 2025. In March 2024, the European Commission opened an investigation into the compliance of our "subscription for no ads" consent model with requirements under Article 5(2) of the Digital Markets Act (DMA). The European Commission issued preliminary findings on July 1, 2024 reflecting its preliminary view that our model does not comply with such requirements. In April 2025, the European Commission issued a final decision that our "subscription for no ads" model does not comply with such requirements and imposed a fine of EUR €200 million. Based on feedback from the European Commission in connection with the DMA, we launched less personalized ads (LPA) in November 2024 and made significant modifications to LPA since the European Commission issued its final decision. We appealed the European Commission's decision on July 4, 2025, but further modifications to our model may be imposed during the appeal process, which could result in a materially worse user experience for European users and a significant impact to our European business and revenue. In December 2025, the European Commission opened an antitrust investigation into our policy of not allowing general purpose AI providers to use the WhatsApp Business API to provide chatbot services, a use which was not a permitted use under our terms of service. While its investigation remains ongoing, in June 2026, the European Commission imposed an interim measure requiring WhatsApp to offer access to the API for free for such general purpose AI providers. We intend to appeal that interim measure. There are similar competition investigations in Africa, Brazil, and Turkey. The result of such litigation, investigations or inquiries could subject us to substantial monetary remedies and costs, interrupt or require us to change our business practices, divert resources and the attention of management from our business, or subject us to other structural or behavioral remedies that adversely affect our business. 53 Table of Contents Securities and Other Actions Beginning on March 20, 2018, multiple putative class actions and derivative actions were filed in state and federal courts in the United States and elsewhere against us and certain of our directors and officers alleging violations of securities laws, breach of fiduciary duties, and other causes of action in connection with our platform and user data practices as well as the misuse of certain data by a developer that shared such data with third parties in violation of our terms and policies, and seeking unspecified damages and injunctive relief. Beginning on July 27, 2018, two putative class actions were filed in federal court in the United States against us and certain of our directors and officers alleging violations of securities laws in connection with the disclosure of our earnings results for the second quarter of 2018 and seeking unspecified damages. These two actions subsequently were transferred and consolidated in the U.S. District Court for the Northern District of California (In Re Facebook, Inc. Securities Litigation) with the putative securities class action described above relating to our platform and user data practices. In a series of orders in 2019 and 2020, the district court granted our motions to dismiss the plaintiffs' claims. On January 17, 2022, the plaintiffs filed a notice of appeal of the order dismissing their case, and on October 18, 2023, the U.S. Court of Appeals for the Ninth Circuit issued its decision affirming in part and reversing in part the district court's order dismissing the plaintiffs' case. We filed a petition for writ of certiorari on March 4, 2024 with the U.S. Supreme Court, seeking review of the Ninth Circuit's order. The Supreme Court granted in part our petition for writ of certiorari on June 10, 2024, and following oral argument issued an order on November 22, 2024 dismissing the grant of certiorari as improvidently granted. On January 24, 2025, the U.S. Court of Appeals for the Ninth Circuit returned the case to the district court. On July 1, 2025, the plaintiffs filed a fourth amended complaint. On September 2, 2025, we filed a motion to dismiss the fourth amended complaint. On February 27, 2026, the district court granted in part and denied in part our motion to dismiss the fourth amended complaint. We are also subject to other government inquiries and investigations relating to our business activities and disclosure practices. For example, beginning in September 2021, we became subject to government investigations and requests relating to a former employee's allegations and release of internal company documents concerning, among other things, our algorithms, advertising and user metrics, and content enforcement practices, as well as misinformation and other undesirable activity on our platform, and user well-being. We have since received additional requests relating to these and other topics. Beginning on October 27, 2021, multiple putative class actions and derivative actions were filed in the U.S. District Court for the Northern District of California against us and certain of our directors and officers alleging violations of securities laws, breach of fiduciary duties, and other causes of action in connection with the same matters, and seeking unspecified damages (In re Meta Platforms, Inc., Securities Litigation). On September 30, 2024, the court dismissed certain claims with leave to amend, but determined certain claims regarding content enforcement practices and user well-being could proceed against us and certain of our current and former directors and officers. On February 13, 2026, the plaintiffs filed a second amended complaint asserting the same and similar claims regarding content enforcement practices and user well-being, as well as additional claims regarding encryption and age verification practices and previously dismissed claims regarding our algorithms. On March 30, 2026, we filed a motion to dismiss the second amended complaint. Youth-Related Actions Beginning in January 2022, we became subject to litigation and other proceedings that were filed in various federal and state courts in the United States as well as other jurisdictions alleging that Facebook and Instagram cause "social media addiction" in users, with most proceedings focused on those under 18 years old, resulting in various mental health and other harms. Putative class actions have been filed in the United States, Brazil, Canada, Europe, and elsewhere on behalf of users in those jurisdictions, and numerous school districts, municipalities, and tribal nations have filed public nuisance claims in the United States and/or Canada based on similar allegations. On October 6, 2022, the U.S. federal cases were centralized in the U.S. District Court for the Northern District of California (In re Social Media Adolescent Addiction Product Liability Personal Injury Litigation). Beginning in March 2023, U.S. states and territories began filing lawsuits on these topics in various federal and state courts. These additional lawsuits include allegations regarding violations of the Children's Online Privacy Protection Act (COPPA), child sexual abuse material and other child safety concerns, as well as violations of state consumer protection laws, unfair business practices, public nuisance, and products liability, with proceedings focused on our alleged business practices (including the use of end-to-end encryption) and harms to users under 18 years old. Certain of the lawsuits described above have since expanded to include various other claims relating to our services, including with respect to age verification, AI and AI chatbots, deceptive advertising, illicit or illegal activity with respect to drugs, fraud, and firearms, and privacy-related matters, among others. These lawsuits seek damages, disgorgement, and/or civil penalties and injunctive relief, and include cases filed by various state attorneys general in In re Social Media Adolescent Addiction Product Liability Personal Injury Litigation in the U.S. District Court for the Northern District of California, as well as 54 Table of Contents various state courts around the country. Trial in the first of the personal injury cases began on January 27, 2026 in Judicial Council Coordination Proceeding No. 5255 pending in Los Angeles County California Superior Court. On March 25, 2026, a jury returned a verdict in the first bellwether trial and awarded $6 million in compensatory and punitive damages between us and YouTube, allocated 70% to us and 30% to YouTube. We have filed a notice of appeal. The second user bellwether trial was scheduled to begin on July 27, 2026. The plaintiff moved to dismiss the case and vacate the trial date, which the court has granted. The next two user bellwether trials are scheduled to begin on October 28, 2026. Trial in the first of the state attorneys general cases began on February 2, 2026 in the First Judicial District Court of New Mexico, in a case brought by the New Mexico Attorney General. On March 24, 2026, a jury returned a verdict against us and ordered that we pay a civil penalty of $375 million. A bench trial on the New Mexico Attorney General's public nuisance claim and request for injunctive relief was held in May 2026. Following that trial, the New Mexico Attorney General is seeking $953 million in abatement costs and a broad set of injunctive terms, which include requests for extensive changes to the manner in which we provide our services in New Mexico. The court has not yet issued a decision. Trials in other state attorneys general cases are currently scheduled or expected to be scheduled in the second half of 2026 or in 2027. Trial in the Tennessee Attorney General's case began on July 20, 2026. In the multidistrict litigation (In re Social Media Adolescent Addiction Product Liability Personal Injury Litigation), trial is scheduled to begin on August 12, 2026, for the first trial for the state attorneys general that have filed state and federal claims. This trial relates to claims asserted by four states and a federal claim for disgorgement asserted by all 29 state attorneys general who have sued in the multidistrict litigation. In the multidistrict litigation (In re Social Media Adolescent Addiction Product Liability Personal Injury Litigation), we entered into a settlement to resolve the first school district bellwether case in May 2026. The next school district bellwether case is scheduled for trial in February 2027. Across the cases described above, the damages, disgorgement, or penalties that plaintiffs have indicated they could seek range widely in amount, including in certain cases up to more than a trillion dollars. Plaintiffs in these matters are also seeking varied injunctive relief, including in some cases extensive changes to our business practices or the manner in which we provide our services and third-party oversight. In addition, beginning in November 2024, counsel for over two hundred thousand individual claimants have sent mass arbitration demands relating to "social media addiction" and related harms allegedly caused by Instagram. We are also subject to government investigations and requests from multiple regulators in various jurisdictions globally concerning the use of our products and services, compliance with applicable laws, and the alleged mental and physical health and safety and privacy impacts on users, particularly younger users, as well as the accuracy of our statements about youth and parental features. On May 16, 2024, the European Commission opened formal proceedings assessing our compliance with certain requirements under Articles 28, 34, and 35 of the Digital Services Act (DSA), including the way in which we identified, assessed, and mitigated against certain systemic risks to minors and other vulnerable users that may stem from the design and functioning of Instagram and Facebook. On April 29, 2026 and July 10, 2026, respectively, the Commission issued preliminary findings with respect to some of these topics, reflecting its preliminary view that users under 13 years of age are present on Facebook and Instagram and that both platforms present potentially addictive design features, calling into question our compliance with the obligations to diligently assess systemic risks, effectively mitigate such risks, and to overall ensure a high level of protection of minors. We have an opportunity to respond to the preliminary findings, and would also have an opportunity to appeal a final decision by the Commission. Other Actions Beginning on August 15, 2018, multiple putative class actions were filed against us alleging that we inflated our estimates of the potential audience size for advertisements, resulting in artificially increased demand and higher prices. The cases were consolidated in the U.S. District Court for the Northern District of California (DZ Reserve v. Facebook, Inc.) and seek unspecified damages and injunctive relief. In a series of rulings in 2019, 2021, and 2022, the court dismissed certain of the plaintiffs' claims, but permitted their fraud and unfair competition claims to proceed. On March 29, 2022, the court granted the plaintiffs' motion for class certification. On March 21, 2024, the U.S. Court of Appeals for the Ninth Circuit affirmed in part and reversed in part the order granting class certification. On May 3, 2024, we filed a petition for panel rehearing and rehearing en banc, which was denied by the Ninth Circuit. We filed a petition for a writ of certiorari with the U.S. Supreme Court on October 2, 2024, which was denied. We then moved to compel arbitration, which the district court denied. We appealed the denial of our motion to compel arbitration to the Ninth Circuit on December 3, 2025. The matter is stayed in district court pending resolution of our appeal. Beginning on July 7, 2023, multiple cases, including putative class actions, were filed against us in the United States and elsewhere, alleging that we improperly acquired, distributed, and used various copyrighted materials and/or other types of data to train our artificial intelligence models and seeking unspecified damages and injunctive relief. In the United States, statutory damages for copyright liability are calculated on a per work basis, which may result in substantial damages, 55 Table of Contents particularly given the large volumes of data required to train AI models. The cases in the United States, which were filed in the U.S. District Court for the Northern District of California (Kadrey, et al. v. Meta Platforms, Inc., Chabon, et al. v. Meta Platforms, Inc. and Farnsworth v. Meta Platforms, Inc.) and U.S. District Court for the Southern District of New York (Huckabee, et al. v. Meta Platforms, Inc. et al., which was subsequently transferred to the U.S. District Court for the Northern District of California), have been consolidated into Kadrey, et al. v. Meta Platforms, Inc. Motions for summary judgment were heard in this case on May 1, 2025, including on the issue of the applicability of the fair use defense to use of copyrighted books for generative AI model training. On June 25, 2025, the court granted our motion for summary judgment on fair use as to the named plaintiffs in the case. The parties will proceed to brief the remaining claims of copyright infringement and contributory infringement related to alleged distribution of books to third parties during the downloading process. The court is scheduled to hear summary judgment motions on February 25, 2027. Beginning in November 2025, additional cases with similar claims were filed against us in the U.S. District Court for the Northern District of California and the Southern District of New York (Entrepreneur Media v. Meta Platforms, Inc., Carreyrou et al. v. Meta Platforms, Inc., TED Entertainment, Inc. v. Meta Platforms, Inc., Chicken Soup for the Soul LLC v. Meta Platforms, Inc., Beaulier v. Meta Platforms, Inc., Cognella, Inc. v. Meta Platforms, Inc., Elsevier Inc. et al. v. Meta Platforms, Inc. et al., Hobbs et al. v. Meta Platforms, Inc. et al., and Sullivan v. Meta Platforms, Inc. et al.). The court is scheduled to hear summary judgment motions in Entrepreneur Media, Carreyrou, Chicken Soup, and Cognella on February 25, 2027. Trial is scheduled in Entrepreneur Media for May 24, 2027. On April 30, 2024, the European Commission opened formal proceedings against us to assess Facebook and Instagram's compliance with certain requirements under Articles 14, 16, 17, 20, 24, 25, 34, 35, and 40 of the DSA, regarding a range of topics including elections, content reporting and appeals, third-party access to data, political content recommendations, potential deceptive advertising and disinformation, including the way in which we identified, assessed, and mitigated against certain systemic risks on Instagram and Facebook. The Commission issued preliminary findings with respect to some of these topics on October 24, 2025 reflecting its preliminary view that we have infringed DSA obligations related to notice and action mechanisms for illegal content reporting, content moderation decision appeals, and data access for researchers. We have an opportunity to respond to the preliminary findings, and would also have an opportunity to appeal a final decision by the Commission. We are also responding to other litigation and government inquiries and investigations in the United States and other parts of the world relating to advertising and other content on our platform and our alleged role in causing or contributing to various societal harms, including illegal activity with respect to drugs, fraud, deceptive activity or advertising, financial scams, unlawful discrimination, and other harms potentially impacting large numbers of people. We have received, and continue to receive, additional requests relating to these and other topics including in connection with ongoing inquiries and investigations. In addition, we are subject to litigation and other proceedings involving law enforcement and other regulatory agencies, including in particular in Brazil, Russia, and other countries in Europe, in order to ascertain the precise scope of our legal obligations to comply with the requests of those agencies, including our obligation to disclose user information in particular circumstances. A number of such instances have resulted in the assessment of fines and penalties against us. We believe we have multiple legal grounds to satisfy these requests or prevail against associated fines and penalties, and we intend to vigorously defend such fines and penalties. We are also party to various other legal proceedings, claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business, and we expect to be subject to additional legal proceedings and disputes in the future. 56 Table of Contents