The tech giant behind Facebook and Instagram has agreed to pay around $18 billion and overhaul how the social media platforms interact with children to settle allegations the company deliberately built addictive products while misleading the public about the risks to young users.
The Settlement
As reported on Thursday’s AM Update, the settlement money is the result of two agreements announced Wednesday. The larger proposed settlement will require Meta to pay at least $12.1 billion and potentially as much as $17.1 billion over the next decade.
The agreement resolves a federal case originally brought by 29 states and expanded to 51 attorneys general representing 47 states, Washington, D.C., and three U.S. territories. Texas reached a separate agreement with Meta worth more than $1 billion. The two deals bringing Meta’s combined state settlements above $18 billion.
The states accused Meta of designing Facebook and Instagram to keep children compulsively engaged, allegedly contributing to mental health problems while violating state consumer-protection laws. Meta, for its part, denied the allegations and admitted no liability under the proposed agreement.
The settlement effectively ends a bellwether trial that began last week in Oakland federal court. California, Colorado, Kentucky and New Jersey led the case on behalf of the original 29-state coalition, which was reportedly seeking roughly $200 billion from Meta before the agreement was reached.
The trial has been suspended while Judge Yvonne Gonzalez Rogers reviews the deal. Rogers reportedly indicated Wednesday that she is inclined to approve the settlement but needs additional time to examine its terms.
The announcement came one day after Instagram Head Adam Mosseri took the stand. Meta CEO Mark Zuckerberg was also expected to testify.
New Safeguards
State attorneys general reasoned the agreement delivers protections that could have been difficult for a court to impose even if the states prevailed at trial.
As part of the settlement, Meta will make sweeping changes to its services, including implementing a default two-hour time limit on its apps for users under 18; launching “night mode,” a default block on its apps between midnight and 6am; and a “school mode” disabling push notifications during school hours of 8am to 3pm. The settings can only be changed with a parent’s permission.
According to California Attorney General Rob Bonta, Meta will also set a default ban on displaying the number of likes or reactions to posts, prohibit the use of plastic surgery filters, and offer an option for users to choose a non-personalized feed (i.e. a feed that doesn’t use an algorithm to target users with content aimed to keep them endlessly scrolling).
Additionally, the agreement will require enhanced age verification, expanded parental controls, and independent monitoring of Meta’s compliance.
The full financial settlement will depend, in part, on whether Meta’s competitors follow its lead. The tech giant is guaranteeing the states at least $12.1 billion while another $5 billion reportedly becomes payable if companies including TikTok and YouTube reach comparable agreements and adopt similar protections.
Meta’s legal team reportedly argued an industry-wide standard is necessary because teenagers may simply move to another platform when their access to one app is restricted. The company called on TikTok and YouTube to accept the same limits and described the agreement as an extension of protections it says it has already introduced.
What Comes Next
The agreement has the potential to reshape thousands of remaining cases against Meta and other social media companies, including lawsuits brought by school districts, parents and young users. It is continuing to fight the remaining lawsuits and is believed to maintain that it can defeat additional personal-injury claims.
We will soon find out if that is the case. Florida Attorney General James Uthmeier, who did not join the settlement, seemed to suggest his state does not plan on settling its own case against Meta.
“The payouts are peanuts compared to the profound harms Meta’s profit-driven addictive features inflicted on kids, and a slap on the wrist for a trillion-dollar corp that’ll pay more to lawyers than to the states,” he wrote on X. “We’ll see them at trial.”
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