Meta Reaches Landmark Settlement Over Teen Platform Addiction
Meta Platforms agreed to pay up to $16.7B and make sweeping changes to Facebook and Instagram to settle claims that it designed its platforms to addict children, ending a federal trial in its second week.
The landmark settlement covers 47 states, the District of Columbia, and US territories, with Meta initially paying roughly $12B.
It will pay an additional $5B if Snap, TikTok, and YouTube also settle with the states and agree to comparable financial penalties and product changes. Meta separately settled with Texas for roughly $1B over similar allegations.
DC Attorney General Brian Schwalb called it the largest state consumer-protection settlement in history outside the Big Tobacco cases of the 1990s.
The states alleged that Meta violated federal child privacy law by collecting data from users it knew were under 13 without parental consent, and used that data to train machine learning and AI models.
Four states leading the trial had been seeking as much as $200B in penalties. Meta denied wrongdoing in agreeing to settle.
Product changes go into effect for all US users
The settlement terms require Meta to impose a two-hour combined daily time limit on Instagram and Facebook for teens, with mandatory pauses after 15 minutes of continuous use.
If Snap, TikTok, and YouTube adopt comparable terms, that limit drops to 60 minutes per platform for 10 years.
Meta must also block teen access to feeds between midnight and 6 a.m. and silence notifications between 10 p.m. and 7 a.m. On weekdays during the school year, push notifications will be eliminated between 8 a.m. and 3 p.m.
Beauty filters and visible like counts, features linked to negative mental health outcomes, will be restricted for teens. Meta must also strengthen age verification tools and parental controls.
An independent auditor will oversee compliance and report findings directly to the settling states.
Meta's chief legal officer wrote that the company wants to set a new industry standard and urged competitors to join the agreement, noting that teens move between dozens of apps daily.
The trial had posed extreme financial risk for Meta. Before it began, Meta estimated a loss could carry penalties of up to $1.4T, close to its entire market capitalization. The company had already spent roughly $2B in the second quarter alone handling legal challenges.
Meta shares rose in early trading before paring gains, reflecting relief at avoiding trial at that scale of exposure. Snap, Roblox, and other social media stocks fell in response to the settlement, signaling that legal pressure is now shifting toward the rest of the industry.