Meta Platforms will pay up to $18 billion over the next decade and strictly limit how teenagers use Facebook and Instagram under an agreement with nearly all U.S. states to resolve claims it designed those social media platforms to addict children.
The settlements announced on Wednesday end a federal trial over allegations Meta’s products harmed children and the company misled the public about their safety. Four of the states — California, Colorado, Kentucky and New Jersey — were expected to seek close to $200 billion in civil penalties.
While Meta will not undergo a fundamental overhaul, the accords represent a sweeping effort to define how it serves young users.
It could provide a template for resolving thousands of other lawsuits against social media companies. Governments around the world are trying to curb children’s access to harmful online content, including a ban in Australia on social media for children under 16.
“The focus of this case was to protect our kids,” Colorado Attorney General Phil Weiser said in a statement. “The relief we are getting in this settlement is very meaningful and well beyond what any court has ordered or is likely to order.”
Meta agreed over the next decade to restrict teenagers’ use of Facebook and Instagram to two hours a day and block all usage from midnight to 6 a.m., absent parental consent.
These limits could be tightened if the social media platforms Snapchat, TikTok and YouTube adopt similar terms. Meta will also disable most push notifications to teenage users during school hours of 8 a.m. to 3 p.m. and enhance measures to prevent children from accessing age-restricted content.
The settlement does not require Meta to abandon personalized recommendations or targeted advertising. It also does not address some content Meta researchers found particularly problematic, including posts that made Instagram users uncomfortable with their body image.
Meta denied wrongdoing in agreeing to settle. The total payout represents about three to four months of profit and about one month of revenue for Meta.
“Ensuring teens have a safe and productive experience on our platforms is an absolute imperative for Meta,” the Menlo Park, California-based company said in a blog post. “We want to get this right for parents and teens.”
Meta shares rose as much as 4.1%, and closed up 1.1%.
Meta agreed to make maximum payments of about $16.7 billion to 47 U.S. states, Washington, D.C., Puerto Rico, American Samoa and the Northern Mariana Islands.
California could receive a $2.2 billion payout, while New York could receive $1.1 billion. Texas reached a separate settlement worth more than $1 billion.
Some states will deposit funds in general accounts, while others will earmark portions to address children’s mental health.
“This is a big deal,” said James Speta, a Northwestern University law professor who specializes in telecommunications and internet policy.
