Meta agrees to $18 billion deal to limit teen use of Facebook and Instagram

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Meta Platforms will pay up to $18 billion over the next ten years and will limit how teens use Facebook and Instagram under a deal with almost all U.S. states to settle claims it made those platforms addictive for children.

The settlements announced on Wednesday end a federal trial over claims that Meta’s products hurt children and that the company misled the public about safety. Four states – California, Colorado, Kentucky and New Jersey – were expected to seek nearly $200 billion in civil penalties.

While Meta will not undergo a major overhaul, the agreements represent a broad effort to define how it serves young users.

It could become a model for settling thousands of other lawsuits against social media firms. Governments worldwide are trying to curb children’s access to harmful online content, including an Australian ban on social media for kids under 16.

“The focus of this case was to protect our kids,” Colorado Attorney General Phil Weiser said. “The relief we are getting in this settlement is very meaningful and far beyond what any court has ordered or is likely to order.”

Meta agreed to limit teen use of Facebook and Instagram to two hours a day for the next ten years and to block all use from midnight to 6 a.m. unless a parent gives consent.

These limits could become stricter if Snapchat, TikTok and YouTube adopt similar rules. Meta will also turn off most push notifications for teen users during school hours from 8 a.m. to 3 p.m. and will boost steps to stop children from seeing age‑restricted content.

The settlement does not force Meta to drop personalized recommendations or targeted ads. It also does not cover some content Meta researchers found especially troubling, such as Instagram posts that made users uncomfortable about their bodies.

Meta denied any wrongdoing in agreeing to settle. The total payout equals about three to four months of profit and about one month of revenue for Meta.

“Ensuring teens have a safe and productive experience on our platforms is an absolute imperative for Meta,” the Menlo Park, California‑based company said in a blog post. “We want to get this right for parents and teens.”

Meta shares rose as much as 4.1 % and closed up 1.1 %.

Meta agreed to make maximum payments of about $16.7 billion to 47 U.S. states, Washington, D.C., Puerto Rico, American Samoa and the Northern Mariana Islands.

California could receive a $2.2 billion payout, while New York could receive $1.1 billion. Texas reached a separate settlement worth more than $1 billion.

Some states will put the money in general funds, while others will set aside parts to address children’s mental health.

“This is a big deal,” said James Speta, a Northwestern University law professor who studies telecommunications and internet policy.

“Meta and other companies were under pressure to change business practices whether or not they lost the lawsuits, from the public and from Congress and state legislatures,” he said. “These restrictions will change the experience on Instagram and Facebook, and they are designed to reduce engagement.”

The settlement includes guaranteed payments of about $12.7 billion, with another $5 billion depending on whether Snap’s Snapchat, ByteDance’s TikTok and Alphabet’s YouTube put similar child‑protection rules in place.

Those companies did not comment right away. Meta plans to publish a letter on Thursday in national newspapers to push TikTok and YouTube to improve child protections. A Meta spokesperson said the company was “hopeful” Snap would make similar changes.

Wednesday’s settlements also require Meta to pay $459 million to settle states’ privacy claims tied to the Cambridge Analytica scandal, where a British consulting firm collected personal data of millions of Facebook users without permission.

U.S. District Judge Yvonne Gonzalez Rogers approved the main settlement late Wednesday. She had overseen the trial that began on August 18.

At a hearing, she called the settlement “a good step forward,” and told lawyers for Meta and the states: “I am quite happy to not have to finish up this trial.”

Instagram head Adam Mosseri had begun testifying before the settlement was announced, and Meta CEO Mark Zuckerberg had been expected to testify.

Mosseri told state representatives last month that Meta would appeal any verdict it lost but would make constructive changes if a settlement could be worked out, people familiar with the matter said.

Social media firms still face thousands of lawsuits in federal and state courts by individuals, school districts, cities and other government bodies claiming they knowingly tried to addict children and caused a mental‑health crisis, including anxiety, depression and suicide. Judge Gonzalez Rogers oversees many of these cases.

The Meta trial included claims by California, Colorado, Kentucky and New Jersey that the company’s conduct broke state consumer‑protection laws.

It also included claims by 29 states that Meta violated the federal Children’s Online Privacy Protection Act by knowingly collecting personal data from children without parental consent, and using the data to train generative AI.

Meta had long argued it could not have misled consumers because “social media addiction” was not a recognized psychiatric condition.

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

Earlier this month, a New Mexico judge ordered Meta to pay $567 million and implement youth‑safety measures, in addition to $375 million a jury ordered Meta to pay in the same case in March for misleading users about platform safety.

Also in March, a Los Angeles jury found Meta and Alphabet’s Google negligent in designing their platforms, and ordered them to pay $6 million to a 20‑year‑old woman who said she became addicted to Instagram and YouTube as a child.

Meta and Google have said they will appeal those verdicts.

Last month, the European Commission threatened to fine Meta unless it changed some product features, after preliminarily finding that the company broke a 2022 EU rule governing the removal of harmful content by large online platforms. A spokesperson said the commission remains in dialogue with Meta on possible changes.

New Mexico was not part of Wednesday’s settlements.

Raul Torrez, the New Mexico attorney general, said the resolution missed some changes his case spurred in his state, including safeguards against adults targeting children and banning sexualized AI chatbot interactions with children, yet “represents real progress and adds momentum to finish the job of protecting kids online.”

Florida also did not settle and plans to keep litigating.

“The payouts to the states are peanuts compared to the profound harms Meta’s profit‑driven addictive features have inflicted on our children,” Florida Attorney General James Uthmeier said. “We’ll see them at trial.”

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Meta agrees to $18 billion deal to limit teen use of Facebook and Instagram

Meta agrees to $18 billion deal to limit teen use of Facebook and Instagram

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