Meta agrees to pay up to $16.7bn, restrict teen use in 29-state lawsuit
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Meta Platforms agreed to pay up to $16.7 billion to settle a lawsuit by 29 US states accusing it of designing Facebook and Instagram to addict children. The settlement includes daily two-hour usage limits for users under 18 and nighttime notification blocks. Meta denied wrongdoing, and the deal still requires court approval.
Key Facts
- Meta will pay up to $16.7 billion to 51 US states and territories, with $5.3 billion contingent on YouTube and TikTok adopting similar daily time limits.
- The settlement requires daily usage limits of two hours for users under 18, removable only by a parent, and blocks push notifications for teens between 10 PM and 7 AM.
- Meta must implement an age assurance standard with a false positive rate no higher than 10 percent for users aged 16 to 17 and 3 percent for users aged 13 to 15.
- The case began on August 18 and was expected to last six weeks before the settlement was announced on Wednesday.
- Meta's stock fell 0.1 percent in early trading on Wall Street following the announcement.
Settlement Terms
Meta agreed to pay up to $16.7 billion to resolve claims brought by a coalition of 29 states, with the total covering 51 states and territories. The company will pay $17.1 billion over 10 years, including $5.3 billion contingent on YouTube and TikTok implementing equivalent daily time limits. Meta denied any wrongdoing as part of the settlement, which still requires court approval. The agreement also requires Meta to identify and remove children under 13 from its platforms.
Platform Changes
Users under 18 will face daily usage limits of two hours, which can only be removed by a parent. Meta will suspend push notifications for teens between 10 PM and 7 AM unless parents disable the restriction. Teens will have the option to turn off personalized feeds, meaning content will not be based on Meta's recommendation algorithm. The company must implement an age assurance standard subject to independent testing, with false positive rates capped at 10 percent for ages 16-17 and 3 percent for ages 13-15.
Legal Context
The federal trial began last week and was expected to last 19 days before the settlement was announced on Wednesday. Meta had faced up to $1.4 trillion in fines, though the coalition sought a penalty closer to $200 billion. Earlier this year, Meta lost state trials in California and New Mexico, resulting in nearly $1 billion in penalties. In a separate announcement, Meta urged YouTube and TikTok to adopt similar changes to their platforms.
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Meta agrees to pay up to $16.7bn, restrict teen use in 29-state lawsuit
