Meta Platforms has agreed to pay up to $16.68 billion and make major changes to Facebook and Instagram to settle claims by U.S. states that the platforms were designed to addict children, misled consumers about their safety and improperly collected children’s personal data, Reuters reported.
The settlement resolves claims brought by 29 U.S. states and ends a federal trial that was among the highest-profile cases involving allegations that social media companies harmed young users.
Under the settlement, Meta will impose daily usage limits and restrict nighttime use by children on Facebook and Instagram. The company will also strengthen measures to prevent children from accessing age-restricted content.
Meta, based in Menlo Park, California, denied wrongdoing in agreeing to the settlement.
The settlement also resolves privacy lawsuits brought by California, Illinois, New Mexico and Washington, D.C., related to the Cambridge Analytica scandal. The four jurisdictions will receive $459.3 million to resolve those claims.
Meta’s shares rose 2.3% in early trading.
The claims form part of a broader wave of lawsuits brought by states, local governments, school districts and individuals alleging that Meta and other social media companies contributed to a nationwide youth mental health crisis.
The federal trial in Oakland, California, involved claims by 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 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 artificial intelligence models.
Meta has argued that 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 Aug. 18, Meta said California, Colorado, Kentucky and New Jersey were seeking up to $1.4 trillion in penalties. The states said the figure would be closer to $200 billion.
Meta, Snapchat parent Snap, YouTube parent Alphabet and TikTok parent ByteDance still face thousands of lawsuits in federal and state courts over allegations that they knowingly designed their platforms with features that encourage addiction among children and teenagers.
The federal cases were consolidated before U.S. District Judge Yvonne Gonzalez Rogers in Oakland and include lawsuits brought by individuals, school districts and state governments. (Newswire)