Meta Agrees to Pay Up to $16.68 Billion Over Social Media Harm to Children

The settlement was reached during a federal trial in California involving claims brought by 29 states. It allowed Meta to avoid continuing one of the most high-profile trials concerning allegations that social media companies harmed young users.

Court documents also show that Meta agreed to change how teenagers use Facebook and Instagram across the United States. In particular, the company must introduce daily usage limits and block access to the platforms at night.

The Menlo Park, California-based company agreed to the settlement without admitting any wrongdoing.

Following news of the settlement, Meta shares rose 4.4% during daytime trading.

The claims are part of a broader wave of lawsuits filed by states, local authorities, school districts, and individuals. The plaintiffs argue that Meta and other social media platforms contributed to a nationwide youth mental health crisis.

The federal trial covered claims from California, Colorado, Kentucky, and New Jersey. Authorities in those states accused Meta of violating state consumer protection laws.

The court also considered claims from 29 states that Meta may have violated the federal Children’s Online Privacy Protection Act. According to the plaintiffs, Meta collected personal data from users it knew were children without notifying their parents or obtaining parental consent. The company allegedly used this information to train machine learning and generative artificial intelligence models.

Meta rejected the allegations and said it had made significant efforts to protect children on its platforms. The company also argued that it could not have misled users about whether its services were addictive because “social media addiction” is not recognized as a distinct mental disorder.

In documents filed before the trial began, Meta said California, Colorado, Kentucky, and New Jersey could seek up to $1.4 trillion in penalties. The states themselves suggested that the amount would be closer to $200 billion.

In addition to financial compensation, the plaintiffs sought an order requiring Meta to make substantial changes to its platforms and prevent children from creating accounts.

Mental health crisis

Meta, Snap, which owns Snapchat, Alphabet, which owns YouTube, and ByteDance, TikTok’s parent company, still face thousands of lawsuits in federal and state courts.

The plaintiffs allege that the companies knowingly built features into their platforms that could make children and teenagers addicted and contributed to the worsening youth mental health crisis.

The federal cases were consolidated before US District Judge Yvonne Gonzalez Rogers in Oakland. The plaintiffs include individuals, school districts, and state governments.

Thousands of additional cases against the technology companies are pending in state courts. In Los Angeles, a judge is overseeing numerous lawsuits filed by people who claim that they or their loved ones were harmed by the design of social media platforms.

According to court records, about 30 states have filed separate lawsuits against the companies in state courts. A trial involving claims brought by the state of Tennessee against Meta has also been underway in Nashville since July.

The latest settlement came after Meta lost both phases of a landmark lawsuit brought by the state of New Mexico. In March, a jury ordered the company to pay $375 million after finding that it had misled users about the safety of its platforms.

On August 6th, a judge also found that Meta’s conduct had created a public nuisance. The company was ordered to pay an additional $567 million and introduce further measures to protect minors.

Also in March, the first trial involving an individual’s claims against Meta and Google ended with a verdict in favor of the plaintiff, Kaley G.M. A Los Angeles jury found the companies liable for her depression and anxiety and ordered Meta and Google to pay a combined $6 million in damages.

The companies said they would appeal the rulings.

All four companies also settled the first case scheduled for trial in federal court, which was brought by a Kentucky school district. The district alleged that the platforms had harmed students. According to public records, the Breathitt County School District was set to receive a total of $27 million.