Meta Platforms has agreed to pay up to $18 billion over the next decade to resolve claims that its Facebook and Instagram platforms contributed to social media addiction among children, the company said on Wednesday.
The settlement, covering 47 U.S. states, Washington, D.C., Puerto Rico, American Samoa and the Northern Mariana Islands, includes $12.7 billion in guaranteed payments. An additional $5 billion is contingent on whether Snapchat, TikTok and YouTube implement similar protections for minors. The maximum payout totals $16.7 billion, with California potentially receiving $2.2 billion and New York $1.1 billion. Texas reached a separate agreement exceeding $1 billion.
The deal resolves a federal trial that began on August 18 under U.S. District Judge Yvonne Gonzalez Rogers. It follows earlier rulings in March, including a $375 million verdict against Meta in New Mexico and a $6 million award to a 20-year-old woman in Los Angeles over platform addiction. The company also faces a potential fine from the European Commission over EU content regulations.
Under the agreement, Meta will impose time limits on teen usage, capping daily access to Facebook and Instagram at two hours and blocking usage from midnight to 6 a.m. unless parents consent. Push notifications to teenage users will be disabled during school hours from 8 a.m. to 3 p.m. The settlement does not require Meta to alter personalized recommendations, targeted advertising or content related to body image concerns identified in research.
Colorado Attorney General Phil Weiser called the settlement "very meaningful and well beyond what any court has ordered or is likely to order." Northwestern University law professor James Speta described the restrictions as a "big deal," noting that Meta and peers faced pressure from regulators and Congress to change practices regardless of litigation outcomes. Judge Gonzalez Rogers called the resolution "a good step forward."
Meta shares rose as much as 4.1% in early trading, closing up 1.1%. The total payout represents roughly three to four months of the company's annual profit and about one month of revenue.
