Meta has reached a settlement valued at up to $16.68 billion with U.S. states that accused Facebook and Instagram of harming children through allegedly addictive design practices and improper collection of minors’ personal information, according to Bloomberg.
The agreement resolves claims involving 29 states and ends a closely watched California federal trial before Meta could face potentially much larger penalties.
Meta did not admit wrongdoing as part of the settlement.
The resolution also requires changes to Facebook and Instagram for teenage users across the U.S.
Those measures include daily usage limits and restrictions on access during certain nighttime hours.
At the center of the litigation were allegations that Meta deliberately built features designed to encourage compulsive use among children and teenagers while misrepresenting the safety of its platforms.
States also alleged that Meta violated the federal Children’s Online Privacy Protection Act by collecting personal information from children under 13 without proper parental notice or consent.
The claims further alleged that Meta used data collected from children to train machine learning and generative AI systems.
The federal case combined consumer-protection allegations from California, Colorado, Kentucky and New Jersey with broader COPPA claims involving 29 states.
Ahead of trial, Meta said the four states were pursuing penalties that could reach $1.4 trillion. The states later said the figure was closer to $200 billion, excluding additional monetary damages, and requested changes to Meta’s platforms.
The states had also sought restrictions that could have prevented children from creating accounts.
By settling, Meta removes one of the most significant near-term legal risks tied to accusations that social media platforms contribute to mental health problems among younger users.
Meta shares climbed about 4.4% in premarket trading after news of the agreement.
The settlement follows another major child-safety case involving Meta in New Mexico.
A jury there previously imposed $375 million in penalties after finding that Meta misled consumers about platform safety. A judge later ordered the company to pay another $567 million and implement youth-safety reforms, bringing total financial exposure in that case to $942 million.
Meta is not alone in facing this broader wave of litigation.
Meta, Snap, Alphabet’s YouTube and ByteDance’s TikTok remain defendants in thousands of federal and state lawsuits alleging that their platforms include features designed to encourage addictive behavior among children and teenagers.
Those cases have been brought by individuals, school districts, local governments and state attorneys general.
Meta has continued to argue that it has invested heavily in safeguards for younger users and has rejected claims that its services should be characterized as inherently addictive.
The company has also argued that “social media addiction” is not a formally recognized psychiatric condition.
Taken together, the $16.68 billion settlement and the required nationwide product changes make this one of the largest and most consequential resolutions so far in the legal fight over how social media companies design and operate products used by minors.
