Meta announced that it has agreed to pay about $18 billion and make major changes to Facebook and Instagram, settling claims that it designed its platforms to addict children, mislead consumers about their safety and improperly collect children’s personal data.
The agreement with 52 U.S. states, territories and the District of Columbia ends a closely watched trial in Oakland, Calif. where federal cases were consolidated. Meta denied wrongdoing in agreeing to the settlement, which still requires court approval, according to Reuters.
“This is a landmark agreement that sets the standard for future cases, and while Meta is the first to come to the table, they shouldn’t be the last. It shouldn’t take lawsuits, legislation or investigations to do the right thing. Keeping our children safe will always be our top priority,” said Georgia Attorney General Chris Carr, in a statement.
The financial terms are unusual. Meta is expected to pay about $12.7 billion over 10 years, while roughly $5.3 billion more is contingent on competitors including TikTok and YouTube adopting comparable protections and matching Meta’s payout.
Under the agreement, Meta will impose a default two-hour daily usage limit for users under 18 and block access from midnight to 6 a.m. unless parents change the settings. The company also agreed to restrict notifications during school hours, strengthen age-verification measures and offer teens a non-personalized feed.
A social media feed not controlled by algorithms will be available to teens as their default. Autoplay can be turned off and ‘likes’ and ‘reactions’ to their posts are hidden by default. Teens also won’t be able to use “extreme makeup filters” along with its existing policy of blocking cosmetic surgery filters, Meta said in a blog post.
Meta said most of the changes are required to stay in place for 10 years, except for its daily usage limit and night mode features, which are set for five years, according to the company. But if “industry peers” agree to impose similar limits, Meta will not only commit to the daily usage limit and night mode for 10 years but will strengthen it to one hour per app of use daily and black out from 10 p.m. to 7 a.m.
The settlement also addresses allegations that Meta violated the federal Children’s Online Privacy Protection Act by collecting data from users it knew were under 13 without parental notification or consent. The states alleged that Meta used children’s data to train machine-learning and generative AI models.
The settlement comes after Meta suffered major courtroom losses earlier this year. A New Mexico jury ordered the company to pay $375 million in March after finding that it misled consumers about the safety of its platforms, Reuters reported. A judge this month ordered another $567 million payment and imposed youth-safety requirements, bringing Meta’s financial exposure in that case to $942 million. Meta plans to appeal those rulings.
The broader legal fight is not over. Meta, TikTok, YouTube and Snap still face thousands of lawsuits from individuals, school districts, states and local governments.