Meta to Pay $16.68 Billion in Social Media Lawsuit Settlement

Meta has agreed to a $16.68 billion settlement to resolve a child safety court case filed by 29 states. The settlement, which was disclosed in a court filing on August 26, ends what could have been one of the most high-profile legal tests on allegations that social media companies have harmed under-age users.

What Was Meta’s Social Media Addiction Lawsuit About?

Twenty-nine U.S. states had accused Meta of deliberately designing Facebook and Instagram with addictive features that encouraged compulsive use among children and teens. The states also alleged that Meta misled the public about its platforms’ safety and collected personal data from minors unlawfully.

The states further claimed that Meta used its platforms to “entice, engage, and ultimately ensnare youth and teens" while ignoring the damage the platforms caused on the "mental and physical wellbeing of America's youth”.

The allegations were part of a wider legal push by states, local governments, school districts and individuals, who accused Meta and other social media companies of contributing to a growing youth mental health crisis across the U.S.

Meta’s $16.68 billion settlement comes after the social media giant lost an underage exploitation lawsuit in New Mexico. In March, a jury ordered Meta to pay $375 million after finding that it misled customers about its platform’s safety.

Earlier this month, a judge ordered the Mark Zuckerberg-led company to pay an additional $567 million for creating a public nuisance. The court also directed the social media giant to implement youth safety measures on its platforms.

When Did the Federal Trial Against Meta Begin?

The federal trial against Meta officially began on August 18 in Oakland California. The trial involved claims from New Jersey, California, Kentucky, and Colorado, which alleged that Meta had violated state consumer protection laws.

It also covered allegations from 29 states where Meta had been accused of violating the U.S. Children's Online ⁠Privacy Protection Act. Prior to the trial, the social media giant said California, Colorado, Kentucky and ⁠New Jersey were seeking up to $1.4 trillion in penalties. The states suggested the figure would be closer to $200 billion.

Additionally, the states wanted the court to award monetary damages, order Meta to change its platforms, and keep children from creating social media platforms. Meta had challenged the allegations made by the states, arguing that social media addiction was not recognized as a psychiatric condition.

What Changes Must Meta Make as Part of the Settlement?

As part of the lawsuit settlement agreement, Meta will cap daily usage time and introduce overnight restrictions on Facebook and Instagram. The settlement also requires Meta to strengthen age-verification mechanisms to keep children off its social media platforms and expand parental control features.

"The safety features Meta is required to install will fundamentally and immediately change how young people use Instagram and Facebook,” District of Columbia Attorney General Brian Schwalb said, terming the settlement “a monumental public health victory”.

While agreeing to settle the social media lawsuit, Meta denied wrongdoing. Parties waived their right to appeal the case after the court issues a final ruling.