Meta Agrees to Pay USD 18 Billion, Limit Teen Social Media Use

Meta Platforms will pay up to USD 18 billion over a decade and introduce strict limits on how teenagers use Facebook and Instagram. This agreement with nearly all US states resolves claims the company designed its social media platforms to addict children. The settlements recently concluded a federal trial concerning allegations Meta's products harmed children and misled the public about platform safety.

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Four states-California, Colorado, Kentucky, and New Jersey-had initially sought civil penalties approaching USD 200 billion. The accord, while not a fundamental overhaul for Meta, establishes a significant framework for its youth user services. It could also provide a template for resolving thousands of other lawsuits against social media companies. Colorado Attorney General Phil Weiser called the settlement relief "very meaningful."

Over the next decade, Meta has committed to restricting teenage use of Facebook and Instagram to two hours per day. And it will block all usage between midnight and 6 a.m., unless parental consent is provided. These limits may tighten if Snapchat, TikTok, and YouTube adopt similar terms. Meta will also disable most push notifications for teenagers from 8 a.m. to 3 p.m. during school hours, enhancing measures against age restricted content access.

The settlement does not mandate Meta to abandon personalised recommendations or targeted advertising. Content Meta researchers found problematic, such as posts affecting Instagram users' body image, remains unaddressed. Meta denies wrongdoing in settling. The payout represents about three to four months of Meta's profit, or roughly one month of its revenue.

Meta agreed to pay up to USD 16.7 billion to 47 US states, Washington D.C., Puerto Rico, American Samoa, and the Northern Mariana Islands. California is to receive USD 2.2 billion, New York USD 1.1 billion. Texas reached a separate settlement for over USD 1 billion. But some states will deposit funds into general accounts, while others will dedicate portions to children's mental health.

The settlement includes guaranteed payments of about USD 12.7 billion. An additional USD 5 billion is contingent on whether Snap Inc's Snapchat, ByteDance's TikTok, and Alphabet's YouTube implement similar child protections. These competing companies were not immediately available for comment. According to Reuters, Meta plans to publish newspaper letters urging TikTok and YouTube to improve child protections.

James Speta, a Northwestern University law professor, described the agreement as "a big deal." But he noted Meta and other Big Tech companies faced pressure to change business practices from the public, Congress, and state legislatures. These restrictions will alter the Instagram and Facebook experience, aiming to reduce engagement.

Social media companies still face thousands of other lawsuits alleging they addicted children and caused mental health crises. Judge Gonzalez Rogers oversees many of these cases. Meta previously argued "social media addiction" was not a recognised psychiatric condition.

Earlier, a New Mexico judge ordered Meta to pay USD 567 million and implement youth safety measures, plus a prior USD 375 million jury order in the same state. And a Los Angeles jury found Meta and Alphabet's Google negligent in platform design. They ordered a USD 6 million payment to a woman aged 20 years for childhood addiction to Instagram and YouTube. Meta and Google intend to appeal these verdicts.

New Mexico did not join the multistate settlements. Attorney General Raul Torrez noted his state's case prompted additional safeguards against adult targeting and sexualised AI chatbot interactions with children, not covered by the broader agreement. Florida also declined to settle, opting for continued litigation. Attorney General James Uthmeier stated payouts were "peanuts compared to the profound harms Meta's profit driven addictive features have inflicted on our children," adding, "We'll see them at trial."

• Meta Platforms will pay up to USD 18 billion over a decade to resolve claims of designing addictive platforms for children.

• New restrictions will limit teenage use on Facebook and Instagram to two hours daily, and block usage from midnight to 6 a.m.

• The settlement includes USD 12.7 billion in guaranteed payments, with USD 5 billion contingent on other platforms adopting similar protections.

• Separate lawsuits continue for Meta and other social media companies, with some states declining to join this settlement.

• Meta denies wrongdoing, despite the significant financial outlay and agreed behavioural changes.

Source: Reuters