Meta Platforms has agreed to pay up to $16.68 billion to settle claims that Facebook and Instagram harmed children and teenagers. Court documents show that the settlement also addresses allegations that Meta misled users about safety and collected children’s personal data without proper consent.
The agreement came during a federal trial in California involving claims from 29 states. The settlement avoids a major courtroom battle over how Meta designed its platforms and their impact on young users.
Meta denied wrongdoing as part of the agreement. The company’s shares rose about 4.4% in pre-market trading after news of the settlement emerged.
Meta Agrees to New Rules for Teen Users
Under the settlement, Meta will make changes to Facebook and Instagram for teenage users across the United States.
The company agreed to introduce daily usage limits and nighttime blocks for younger users. The measures aim to reduce the amount of time teenagers spend on the platforms and limit their access during overnight hours.
The states had accused Meta of deliberately designing features that could encourage children to spend excessive amounts of time on its services.
Meta has rejected those claims. The company has said it works hard to protect young people and has challenged the idea that its platforms create a recognized form of social media addiction.
States Accused Meta of Misusing Children’s Data
The federal case also focused on children’s privacy.
Twenty-nine states accused Meta of violating the federal Children’s Online Privacy Protection Act. They alleged that the company collected personal information from children without notifying their parents or obtaining the required consent.
The states also claimed that Meta used children’s data to train machine-learning and generative artificial intelligence systems.
The company denied those allegations and maintained that its practices comply with the law.
Before the trial, Meta said several states could seek enormous financial penalties. California, Colorado, Kentucky and New Jersey had initially sought potentially massive damages under their consumer protection laws.
Social Media Companies Face Wider Youth Safety Lawsuits
The Meta settlement comes as social media companies face thousands of lawsuits over alleged harm to children and teenagers.
Meta, Snap, Alphabet and ByteDance remain defendants in cases involving Facebook, Instagram, Snapchat, YouTube and TikTok. Parents, schools and government agencies accuse the companies of using platform designs that encourage young people to remain online for long periods.
Around 30 states have also filed separate lawsuits in state courts. Those cases could continue despite Meta’s federal settlement.
The companies have consistently denied wrongdoing and continue to fight many of the claims.
Meta Previously Lost Major Youth Safety Cases
The settlement follows several important legal setbacks for Meta.
In March, a New Mexico jury ordered Meta to pay $375 million after finding that the company misled consumers about the safety of its platforms. A judge later ruled that Meta had created a public nuisance and ordered the company to pay another $567 million while requiring additional youth-safety measures.
Another major case ended with a Los Angeles jury finding Meta and Google liable for harm suffered by a plaintiff identified as Kaley G.M. The jury awarded a combined $6 million over claims involving depression and anxiety.
Meta and the other companies have said they plan to appeal those verdicts.
The latest settlement could become one of the largest financial agreements involving alleged social media harm to children. It also places new restrictions on how Meta operates its platforms for teenagers while thousands of other cases continue across the United States.
