Meta agrees to pay $18 bn to settle Facebook and Instagram addiction trial

The deal ends a federal trial that could have exposed the social media giant to massive penalties and forced changes to Facebook and Instagram Meta has reached a settlement in a landmark lawsuit filed by multiple US states that accused it of deliberately designing Facebook and Instagram to addict children and teenagers.

The social media giant has faced allegations of encouraging compulsive use among young people, misleading consumers about the safety of its platforms, and improperly collecting personal data from children under 13.

Meta previously estimated that the claims could have exposed it to penalties of as much as $1.4 trillion, while the states were also seeking sweeping changes to how Facebook and Instagram operate.

On Wednesday, the social media giant announced that it had reached an approximately $18 billion settlement with 52 attorneys general across US states, territories, and the District of Columbia, effectively ending the case without a jury ruling on the allegations and without Meta CEO Mark Zuckerberg taking the stand.

Read more Zuckerbeg’s Meta in $1.4 trillion addiction showdown: Why is the giant in court again? Meta said the money would be paid out over the next ten years and earmarked to fund youth online safety initiatives, among other state priorities.

The settlement, which still requires judicial approval, will also force significant changes to Facebook and Instagram for users under 18.

Teens will face a two-hour daily limit across both apps unless a parent allows them more time, while access will be blocked from midnight to 6 AM and most notifications muted during school hours.

Meta said it will also offer teenagers the option of a non-algorithmic feed, allow autoplay to be disabled, hide like counts by default, and strengthen age checks and parental controls.

Most of the measures will remain in place for ten years.

The tech giant has further demanded that rival tech giants TikTok and YouTube also face certain restrictions.

Meta said it would pay out 30% of the settlement, or $5.3 billion, only if the two companies adopt similar safeguards and make matching payments.

The settlement came during the second week of a federal trial in Oakland, California involving claims brought by 29 states, which based their accusations on Meta’s own internal research and communications.

Read more TikTok dodges US trial over children’s data Court documents cited company data showing that teenagers were disproportionately being exposed to harmful material, including content involving suicide, self-harm, eating disorders, bullying, and violence.