Meta Platforms will pay up to $18 billion over a decade under a settlement resolving allegations that its platforms were engineered to be addictive to minors and that children’s data was improperly harvested for AI model training.
The agreement, led by a 29-state coalition of attorneys general, includes an initial $12.7 billion in payments distributed over 10 years, with the remaining $5.3 billion contingent on competitors YouTube and TikTok adopting equivalent safeguards. California is projected to receive between $1.5 billion and $2.1 billion of the total.
Meta will accrue approximately $10 billion in legal expenses in the third quarter of 2026, while its 2026 capital expenditure for AI infrastructure is projected at up to $145 billion. The company, which generates about 98% of its revenue from digital advertising, has denied the underlying allegations.
Under the settlement terms, Meta will implement default daily screen-time limits of two hours for users under 18, adjustable only via parental override, and drop to one hour if competitors adopt similar limits. Overnight account locks from midnight to 6:00 a.m. and muted notifications during overnight hours and school hours will be enforced. Additional measures include opt-out options for non-personalized feeds, removal of cosmetic procedure filters for teens, and stricter age-assurance systems to eliminate accounts of children under 13.
An independent auditor will oversee compliance, with direct reporting lines to state enforcement officials. California Attorney General AG Bonta stated that the agreement mandates "massive transformations" to reduce harm from Meta’s platforms within months.
Meta’s shares were initially up more than 4% in pre-market trading but later traded flat, closing near $571.16, down 0.86%.
