Meta reaches $16.68 billion settlement over social media harms

Meta will impose daily usage limits and restrict nighttime usage by children ​who use Facebook and Instagram, and enhance measures to prevent children from accessing age-restricted content.

The Menlo Park, California-based company denied ​wrongdoing in agreeing to settle.

Wednesday’s settlement also resolves lawsuits by California, Illinois, New Mexico and Washington, D.C., over ⁠privacy claims related to the Cambridge Analytica scandal, where the consulting firm collected personal data of millions of Facebook users.

Those states ​will receive $459.3 million to resolve those lawsuits.

Shares of Meta rose 2.3% in early trading.

The claims were part of a broader wave of litigation brought ​by states, local governments, school districts and individuals alleging that Meta and other social media companies fuelled a nationwide youth mental health crisis .

The trial in the Oakland, California, federal court covered claims from California, Colorado, Kentucky and New Jersey that Meta violated their state laws protecting consumers.

It also covered claims from 29 ​states that Meta violated the federal Children’s Online Privacy Protection Act by collecting personal data from users it knew were children without parental ​notification or consent and using the data to train machine learning and generative AI models.

Meta has long argued it could not have misled consumers about whether ‌its services ⁠were addictive because “social media addiction” is not a recognized psychiatric condition.

Before the trial began on August 18, Meta said California, Colorado, Kentucky and New Jersey were seeking up to $1.4 trillion in penalties.

The states suggested that the figure would be closer to $200 billion.

A mental health crisis Meta, Snapchat and its parent Snap, YouTube and its parent Alphabet and TikTok and its parent ByteDance still face thousands of lawsuits in federal and state ​courts over claims that they knowingly designed ​their platforms to have features ⁠that addict children and teenagers, fuelling a mental health crisis.

A trial in Nashville over claims was brought by Tennessee against Meta began last month.

The federal cases were consolidated before US District Judge Yvonne Gonzalez Rogers ​in Oakland, and include lawsuits brought by individuals, school districts and state governments.