Meta Agrees to $16.68 Billion Settlement Over Youth Safety

MENLO PARK, Calif. (News Desk) — Meta Platforms has agreed to pay up to $16.68 billion and introduce major changes to Facebook and Instagram to settle claims brought by U.S. states that the platforms were designed to encourage addictive use among children, misled users about safety and improperly collected minors’ personal information.

The settlement covers claims from 29 U.S. states and brings an end to a closely watched federal trial that examined allegations that social media platforms had contributed to harm among young users.

Under the agreement, Meta will introduce daily usage limits and nighttime restrictions for children using Facebook and Instagram. The company will also strengthen measures intended to prevent minors from accessing age-restricted content.

Meta has denied wrongdoing as part of the settlement.

The agreement also resolves privacy lawsuits filed by California, Illinois, New Mexico and Washington, D.C. over allegations linked to the Cambridge Analytica scandal, in which millions of Facebook users’ personal data was collected. Those jurisdictions will receive a combined $459.3 million under the settlement.

Meta shares rose 2.3% in early trading following news of the agreement.

The settlement comes amid a much broader legal battle involving Meta and other major technology companies. State and local governments, school districts and individual users have filed thousands of cases alleging that social media companies deliberately developed features that encouraged excessive use among children and teenagers and contributed to a wider youth mental health crisis.

The federal trial in Oakland involved claims from California, Colorado, Kentucky and New Jersey, which accused Meta of violating state consumer protection laws.

The case also included claims from 29 states that Meta violated the federal Children’s Online Privacy Protection Act (COPPA) by collecting information from children without appropriate parental notification or consent. The states further alleged that the data was used to train machine-learning and generative AI systems.

Meta has previously argued that it could not have deceived consumers by describing its platforms as addictive because social media addiction is not formally recognized as a psychiatric disorder.

Before the trial began on August 18, Meta said the four states involved in the consumer-protection claims were seeking as much as $1.4 trillion in penalties. The states estimated that the figure would be closer to $200 billion.

Wider Youth Mental Health Litigation

Meta, along with Snap, Alphabet and ByteDance, continues to face thousands of lawsuits across federal and state courts. The cases allege that companies knowingly designed social media platforms with features capable of encouraging addictive behavior among young users.

Earlier this year, Meta suffered setbacks in litigation brought by New Mexico. In March, a jury ordered the company to pay $375 million after finding that it had misled consumers about the safety of its platforms. On August 6, a judge separately ruled that Meta had created a public nuisance and ordered the company to pay another $567 million while implementing additional youth-safety measures.

In another significant case, a Los Angeles jury in March found Meta and Google liable in a lawsuit brought by an individual who said the companies’ platforms contributed to depression and anxiety. The companies were ordered to pay a combined $6 million in damages.