Meta Platforms has agreed to a maximum $16.68 billion settlement with U.S. states to resolve allegations that its platforms, Facebook and Instagram, were designed to addict children, misled consumers about their safety, and improperly collected children’s personal data. The agreement also mandates major changes to the company's social media services.
The settlement concludes claims brought by 29 U.S. states and will halt a federal trial that was examining accusations that social media companies have harmed young users. Meta denied wrongdoing in agreeing to the settlement.
As part of the agreement, Meta will introduce daily usage limits and restrict nighttime usage for children on Facebook and Instagram. The company will also enhance measures to prevent minors from accessing age-restricted content.
The settlement also resolves lawsuits from California, Illinois, New Mexico, and Washington, D.C., concerning privacy claims linked to the Cambridge Analytica scandal, where personal data from millions of Facebook users was collected by the consulting firm. These states are set to receive $459.3 million from these lawsuits.
Meta, along with other social media companies like Snap, Alphabet (Google), and ByteDance (TikTok), faces thousands of lawsuits. These suits allege that the companies deliberately designed their platforms with features that foster addiction in children and teenagers, contributing to a national mental health crisis. A trial in Nashville concerning claims brought by Tennessee against Meta began last month.
The federal cases were consolidated under U.S. District Judge Yvonne Gonzalez Rogers in Oakland. These include lawsuits from individuals, school districts, and state governments.
Earlier this year, Meta faced separate legal challenges. A jury in New Mexico ordered the company to pay $375 million after finding it had misled consumers about platform safety. Subsequently, a judge ruled Meta had created a public nuisance and ordered an additional $567 million payment and the implementation of youth-safety measures.
In March, the first trial involving individual claims against Meta and Google concluded with a verdict in favor of the plaintiff. A Los Angeles jury found both companies liable for the plaintiff's depression and anxiety, awarding a combined $6 million in damages. Meta and Google have indicated they plan to appeal these verdicts.
Shares of Meta saw a 2.3% increase in early trading following the announcement of the settlement. The company is headquartered in Menlo Park, California.