Meta has agreed to a $16.68 billion settlement to resolve claims brought by 29 US states over alleged harm caused to children by its social media platforms, bringing an end to a closely watched federal trial.
Under the settlement, Meta will introduce daily usage limits for children on Facebook and Instagram, restrict nighttime access and strengthen measures to prevent minors from viewing age-restricted content.
The California-based company denied wrongdoing as part of the agreement.
The settlement also resolves privacy lawsuits filed by California, Illinois, New Mexico and Washington, DC, over the Cambridge Analytica scandal, in which personal data belonging to millions of Facebook users was collected. The four jurisdictions will receive $459.3 million under the agreement.
Meta shares rose 2.3 per cent in early trading.
The cases were part of a wider wave of lawsuits accusing Meta and other social media companies of contributing to a youth mental health crisis by designing platforms with features that encourage addictive use.
The federal trial included claims by California, Colorado, Kentucky and New Jersey that Meta violated consumer protection laws. The 29 states also alleged that the company breached the federal Children’s Online Privacy Protection Act by collecting data from users it knew were children without parental consent and using the information to train machine-learning and generative AI systems.
Meta has maintained that it could not have misled users by describing its services as addictive because “social media addiction” is not formally recognised as a psychiatric disorder.
Before the trial began on August 18, Meta said the four states were seeking as much as $1.4 trillion in penalties, while the states estimated the figure at around $200 billion.
Meta, Snap, YouTube and TikTok continue to face thousands of lawsuits in US federal and state courts over allegations that their platforms were deliberately designed to keep children and teenagers engaged, contributing to mental health problems.
Earlier this year, Meta suffered legal setbacks in New Mexico. A jury in March ordered the company to pay $375 million after finding that it had misled consumers about the safety of its platforms. In August, a judge ordered Meta to pay a further $567 million and implement additional measures to protect young users.
In another landmark case in March, a Los Angeles jury found Meta and Google liable for depression and anxiety suffered by a plaintiff and ordered the companies to pay $6 million in damages. Both companies have said they will appeal the verdicts.
