Meta reaches $18 billion of settlements over children's social media addiction

Meta Platforms has agreed to major changes for Facebook and Instagram, including a potential $18 billion payout, to resolve claims that the social media giant intentionally designed its platforms to addict children and misled the public about their safety. The settlements announced Wednesday conclude a high-profile federal trial that scrutinized allegations of harm to young users.

While Meta will not face a complete overhaul, the agreements signify a substantial move to govern the online experience for minors. Colorado Attorney General Phil Weiser stated the relief obtained is "very meaningful and well beyond what any court has ordered or is likely to order," emphasizing the focus on protecting children.

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The focus of this case was to protect our kids. The relief we are getting in this settlement is very meaningful and well beyond what any court has ordered or is likely to order.

For the next decade, Meta will limit teenagers' use of Facebook and Instagram to two hours daily and block usage from midnight to 6 a.m. unless parents consent. The company will also strengthen measures to prevent underage users from accessing age-restricted content. These limits could become stricter if other social media companies adopt similar terms.

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Ensuring teens have a safe and productive experience on our platforms is an absolute imperative for Meta. We want to get this right for parents and teens.

The settlement, which Meta entered into without admitting wrongdoing, does not compel the company to abandon its personalized recommendation algorithms or targeted advertising practices. The total payout amounts to roughly three to four months of Meta's profits. "Ensuring teens have a safe and productive experience on our platforms is an absolute imperative for Meta," the company stated in a blog post. "We want to get this right for parents and teens."

The accords involve over $17.6 billion in payments to 48 U.S. states, Washington D.C., Puerto Rico, American Samoa, and the Northern Mariana Islands. An additional $459 million will resolve states' privacy claims stemming from the Cambridge Analytica scandal. California is set to receive the largest share, $2.2 billion, with New York and Texas each receiving over $1 billion. Some of the payout is contingent on Alphabet's YouTube and ByteDance's TikTok implementing comparable child protection measures.

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This is a big deal. Meta and other companies were facing pressure to change business practices whether or not they lost the lawsuits, from the public and from Congress and state legislatures. These restrictions will change the experience on Instagram and Facebook, and they are designed to reduce engagement.