Meta agreed yesterday, August 26, to a settlement worth as much as US$16.68 billion over allegations concerning the impact of Facebook and Instagram on children and the handling of young users’ data.
The settlement was reached during a federal trial in California involving claims brought by 29 states. Meta denied wrongdoing in agreeing to the deal.
The trial covered claims from California, Colorado, Kentucky and New Jersey that Meta violated state consumer protection laws. It also covered claims from 29 states that the company violated the federal Children’s Online Privacy Protection Act.
The states alleged that Meta collected personal data from users it knew were children without notifying or obtaining consent from their parents. They also accused the company of using the data to train machine learning and generative AI models.
As part of the settlement, Meta agreed to introduce changes for teenage Facebook and Instagram users across the US, including daily usage limits and nighttime blocks.
CBS News reported that the measures will include a two-hour daily time limit for teenagers and muted push notifications during school hours. Meta will also strengthen age verification and parental controls while limiting social-comparison features such as visible like counts.
The agreement brings an early end to one of the most high-profile legal tests of claims that social media platforms have harmed young users.
Before the trial, Meta said California, Colorado, Kentucky and New Jersey were seeking up to US$1.4 trillion in penalties, although the states suggested the figure would be closer to US$200 billion. They were also seeking additional damages and major changes to Meta’s platforms.
Meta has denied the allegations and maintained that it has worked to protect children using its platforms. The company also argued that it could not have misled consumers over whether its services were addictive because social media addiction is not a recognised psychiatric condition.
The settlement does not end Meta’s wider legal battles over social media and young people. Meta, Snap, Alphabet and ByteDance still face thousands of lawsuits alleging their platforms were designed with addictive features that harmed young users.
Meta also faces a separate trial in Nashville and has recently lost a case brought by New Mexico. A jury ordered the company to pay US$375 million in March, while a judge ordered another US$567 million on August 6 after finding that Meta had created a public nuisance.
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