Meta Platforms has agreed to pay up to $16.68 billion in a settlement to address allegations from various U.S. states that it engineered Facebook and Instagram to foster addiction in children, provided misleading information about their safety, and unlawfully gathered children’s personal information. The settlement was struck during a federal trial in California involving 29 states, sidestepping a significant test concerning accusations of social media platforms negatively impacting young users. As part of the agreement, Meta will implement changes for teenage users nationwide, including setting daily usage limits, restricting nighttime usage for children, and improving safeguards to prevent access to age-restricted content. Despite agreeing to the settlement, the California-based company has denied any wrongdoing.
The settlement also resolves lawsuits from California, Illinois, New Mexico, and Washington, D.C., relating to privacy concerns linked to the Cambridge Analytica scandal. These states will collectively receive $459.3 million to settle the litigation. These claims were part of a broader legal wave by states, local entities, school districts, and individuals accusing Meta and other social media firms of contributing to a nationwide youth mental health crisis. The federal trial in Oakland, California, covered allegations from California, Colorado, Kentucky, and New Jersey that Meta violated state consumer protection laws, as well as claims from 29 states that Meta violated the U.S. Children’s Online Privacy Protection Act by collecting personal data from known child users without parental consent and using the data for machine learning and AI models.
Before the trial, Meta disclosed that California, Colorado, Kentucky, and New Jersey sought penalties of up to $1.4 trillion, while the states estimated the figure to be closer to $200 billion. The states also sought additional monetary damages and requested Meta to make substantial platform changes and prevent children from creating accounts. Moreover, Meta, Snapchat, YouTube, TikTok, and their respective parent companies face numerous lawsuits in federal and state courts alleging they intentionally designed their platforms to be addictive to children and adolescents, contributing to mental health issues. These federal cases have been consolidated before U.S. District Judge Yvonne Gonzalez Rogers in Oakland and involve suits from individuals, school districts, and state governments. In state courts, thousands of additional lawsuits against the companies are pending, with a judge in Los Angeles overseeing multiple cases brought by individuals claiming harm from platform designs.
The settlement follows Meta’s losses in a lawsuit in New Mexico, where it was ordered to pay $375 million for misleading consumers about platform safety. Additionally, a judge ruled in August that Meta created a public nuisance, leading to an extra $567 million in penalties and the implementation of youth safety measures. Another trial in March ruled in favor of an individual against Meta and Google, awarding damages for depression and anxiety. While the companies plan to appeal these verdicts, they settled the first trial in federal court with a Kentucky school district, agreeing to compensate Breathitt County School District with $27 million according to public records.
