Meta To Pay Up To $16.68 Billion, Make Major Changes To Facebook, Instagram In Settlement Over Youth Safety Claims

*Meta Platforms Inc. (META.O)* has agreed to pay a *maximum of $16.68 billion* and implement major changes to *Facebook and Instagram* to settle claims by U.S. states that the company designed its platforms to addict children, misled consumers about safety, and improperly collected children’s personal data.

The settlement resolves claims brought by *29 U.S. states* and ends a federal trial that was one of the most high-profile tests of allegations that social media companies harmed young users.

*Terms Of The Settlement*

As part of the agreement, Meta will:

– *Impose daily usage limits* and *restrict nighttime use* for children on Facebook and Instagram

– *Enhance measures* to prevent children from accessing age-restricted content

Meta denied wrongdoing in agreeing to settle.

*Privacy Claims Also Resolved*

The *Wednesday* settlement also resolves lawsuits by *California, Illinois, New Mexico and Washington, D.C.* over privacy claims related to the *Cambridge Analytica scandal*, in which the consulting firm harvested 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.

*Broader Litigation Over Youth Mental Health*

The claims are part of a wider wave of litigation by states, local governments, school districts and individuals alleging that Meta and other social media companies fueled a nationwide youth mental health crisis.

The trial in *Oakland, California federal court* covered claims from *California, Colorado, Kentucky and New Jersey* that Meta violated state consumer protection laws.

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

Meta has long argued it could not have misled consumers about addiction because _“social media addiction”_ is not a recognized psychiatric condition.

Before the trial began on *August 18*, Meta said the four states were seeking up to *$1.4 trillion* in penalties. The states said the figure would be closer to *$200 billion*.

*Ongoing Cases*

Meta, *Snap (SNAP.N)*, *YouTube/ Alphabet (GOOGL.O)*, and *TikTok/ ByteDance* still face thousands of lawsuits in federal and state courts over claims they knowingly designed features that addict children and teenagers.

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

The federal cases are consolidated before *U.S. District Judge Yvonne Gonzalez Rogers* in Oakland, and include suits by individuals, school districts and state governments.

*Recent Losses For Meta*

Earlier this year, Meta lost both phases of a landmark lawsuit brought by *New Mexico*:

– A jury in *March* ordered Meta to pay *$375 million* for misleading consumers about platform safety

– On *August 6*, a judge found Meta created a public nuisance and ordered an additional *$567 million* plus youth-safety measures

Also in *March*, a *Los Angeles* jury found Meta and Google liable in the first individual trial. The companies were ordered to pay a combined *$6 million* in damages to plaintiff Kaley G.M. for depression and anxiety.