Meta, the parent company of Facebook and Instagram, has reached an agreement to pay as much as $16.68 billion to settle lawsuits filed by a bipartisan coalition of 52 attorneys general from various states, territories, and the District of Columbia, according to a court document released by the EFE agency.
This settlement concludes a federal trial that was taking place in Oakland, California, involving claims from 29 states. The legal proceedings began on August 18, with California, Colorado, Kentucky, and New Jersey leading the litigation efforts.
The authorities accused Meta of designing its social media platforms to be addictive for minors and misleading consumers about the safety of their platforms. Additionally, the company was charged with collecting data from children, violating the federal child privacy law, COPPA.
Meta agreed to the settlement to avoid extended litigation, but continues to deny any wrongdoing or liability.
Financial Structure of the Settlement
The financial arrangement is intricate. Roughly 70% of the amount—about $12.7 billion—will be divided among the participating states through annual payments over a decade, intended to support online youth safety initiatives and mental health programs.
The remaining 30%—approximately $5.3 billion—is conditional, to be disbursed only if TikTok and YouTube implement similar safety measures for minors and contribute comparable sums. The total figure could reach $18 billion, according to Meta's official statement.
Commitment to Safety Measures
In addition to the payment, Meta pledged to implement a series of protections for users under 18 on Instagram and Facebook, maintaining them for at least ten years. These measures include a daily usage cap of two hours—modifiable only with parental consent—nighttime app lockdowns from midnight to 6 a.m., silencing notifications during school hours, mandatory alerts after 15, 60, and 90 minutes of continuous use, default hiding of "like" counts, and blocking filters for extreme cosmetic surgery and makeup.
Meta also issued an open letter urging TikTok and YouTube to adopt the same measures, stating that "these protections will only be truly effective if we collaborate with our peers to implement similar actions."
The announcement followed testimony from Adam Mosseri, Instagram's head, in the California trial. Mosseri admitted that some protective measures for minors had a "much smaller impact than we expected." It was anticipated that CEO Mark Zuckerberg would also testify before the settlement was finalized.
Exclusions and Market Reaction
The agreement does not include New Mexico and Florida, which have separate ongoing litigations against the company. Additionally, the settlement still requires judicial approval to become final.
Following the announcement, Meta's stock rose over 3% on Wall Street, indicating that the markets viewed the settlement as a favorable resolution for the company amid years of legal uncertainty.
The case originated in 2023, when the coalition of attorneys general initially filed the lawsuits, making this agreement the largest out-of-court settlement in U.S. history related to social media harm to minors.
Frequently Asked Questions About Meta's Legal Settlement
What prompted the lawsuits against Meta?
The lawsuits were driven by allegations that Meta's platforms were designed to be addictive for minors and that the company misled consumers about safety, while also violating federal child privacy laws.
How will the settlement funds be used?
Approximately 70% of the settlement funds will support online safety initiatives and mental health programs for youth, distributed to participating states over ten years. The remaining 30% is contingent upon similar safety measures by TikTok and YouTube.
What are some of the protections Meta plans to implement?
Meta plans to enforce a daily usage limit, app lockdowns during certain hours, notification silencing during school, usage alerts, and blocking specific filters, among other measures, for users under 18.