Meta has agreed to pay up to $17.1 billion to settle a lawsuit brought by multiple US state attorneys general over claims that Facebook and Instagram deliberately made teenagers addicted, according to The New York Times.
The agreement, reported on Aug. 26 Taipei time, would end a major trial that had been underway in federal court in Oakland, California. Meta, the parent company of Facebook and Instagram, reached the deal with a coalition of state attorneys general as the case moved through court.
The case centered on addictive features and minors’ data
The lawsuit accused Meta of intentionally designing addictive algorithms and product features such as infinite scroll. It also said the company misled the public about the safety of its platforms.
The complaint went further, alleging violations of the Children’s Online Privacy Protection Act, or COPPA. According to the report, Meta was accused of collecting personal data from minors without parental consent and using that information to train machine learning and generative AI models.
Base payout could reach $12.19 billion over 10 years
A statement from the Connecticut attorney general’s office said Meta must pay up to $12.19 billion over the next 10 years.
That figure could climb to as much as $17.1 billion if competing platforms, including TikTok, YouTube, and Snapchat, later agree to similar safety reforms and monetary settlement terms.
The case was led by California, Colorado, Kentucky, and New Jersey. Those states had previously signaled they might pursue penalties of as much as $1.4 trillion, then later reduced that figure to nearly $200 billion, according to the report.
As part of the settlement, Meta denied wrongdoing and denied legal liability. Even so, the agreement allows the company to avoid a full trial that could have produced a major precedent in the US.
After the news was released, Meta shares rose about 4.4% to 5% in premarket trading.
Daily time caps and overnight restrictions for users under 18
The most visible part of the settlement may be the product changes Meta will have to make nationwide for users under 18.
Under the deal, Instagram and Facebook together will carry a default daily usage limit of two hours. After 15, 60, or 90 minutes of continuous use, the system will force users to stop through what the report described as Productive Pauses.
Meta will also impose nighttime restrictions from 12:00 a.m. to 6:00 a.m. for teenagers. During the school year, push notifications will be turned off on weekdays from 8:00 a.m. to 3:00 p.m.
The company must also strengthen age verification and expand parental supervision tools. Those tools will let parents switch off algorithmic feeds, hide like counts, and disable beauty filters and other social comparison features that may contribute to appearance anxiety.
State attorneys general warned other platforms
California Attorney General Rob Bonta said the agreement would make social media 「less dangerous for kids」.
Connecticut Attorney General William Tong used much sharper language. He said Meta had 「stripped the souls out of American children for maximum profit」 and publicly warned TikTok, YouTube, and Snapchat: 「You are next.」
According to The New York Times, the settlement money would be subject to strict oversight. At least more than half of the funds must be set aside to address harm linked to social media use among young people, including mental health crisis intervention, phone-free school initiatives, and support for after-school and summer programs.
Judge approval is still required
The settlement has not taken effect yet. It still needs approval from a judge.
The New York Times also noted that thousands of related lawsuits are still moving through courts across the United States.