Meta settles U.S. multistate teen social media lawsuit for $16.7 billion
Meta Platforms agreed to pay up to $16.68 billion to resolve allegations from 29 states in the U.S. accusing the company of engineering Facebook and Instagram to be addictive to children, deceiving the public about platform safety, and unlawfully gathering personal data from minors, according to Reuters. The settlement was disclosed in a court filing on Wednesday.
As part of the agreement, Meta is required to introduce daily time caps and overnight restrictions for teen users of Facebook and Instagram across the country, strengthen age-checking systems to keep children off the platforms, and expand parental control features. All parties waive their right to appeal once the court issues a final judgment. Meta denied wrongdoing in agreeing to settle.
Meta stock rose 4.4% in premarket trading after the settlement was announced.
The settlement emerged in the middle of a federal trial in Oakland, with U.S. District Judge Yvonne Gonzalez Rogers presiding; California Attorney General Rob Bonta and his counterparts from Colorado, New Jersey, and Kentucky jointly led the litigation representing all 29 states. The four lead states had been pursuing additional consumer protection claims under their individual state laws, while all 29 states pressed federal claims tied to alleged violations of the Children’s Online Privacy Protection Act, which bars platforms from collecting data on minors without parental consent, according to Reuters.
The states had been seeking both monetary penalties and sweeping changes to Meta’s platforms. Ahead of the trial, Meta’s own filings placed the ceiling on potential penalties at around $1.4 trillion, whereas the states’ attorneys general had argued that a more realistic estimate landed near $200 billion.
As settlement talks emerged earlier this week, the trial had already featured testimony from Instagram chief Adam Mosseri, along with current and former Meta employees involved in platform design and teen engagement research. Meta founder and chief executive Mark Zuckerberg had also been expected to testify. California Deputy Attorney General Megan O’Neill described Meta’s business model to the jury as one designed to “hook the users, hold them for as long as they can, harvest their data, and then hide the truth from the public.”
The federal case is one of more than 3,000 lawsuits against Meta and other social media companies consolidated before Judge Gonzalez Rogers. Meta, Snap, YouTube parent Alphabet, and TikTok parent ByteDance continue to contend with thousands of pending cases in federal and state courts alleging that each company deliberately engineered its platform with features meant to hook young users. A separate trial over claims brought by a state against Meta has been ongoing in Nashville since July.
