Meta Platforms will pay up to $18 billion over 10 years under a settlement resolving claims that its Facebook and Instagram platforms were designed to be addictive to minors and that personal data was harvested without parental consent.
The agreement, led by a 29-state coalition of attorneys general, includes an immediate $12.7 billion distribution to participating states, representing 70% of the total settlement. The remaining $5.3 billion is contingent on contributions from YouTube and TikTok, with half tied to each platform’s participation. California is projected to receive between $1.5 billion and $2.1 billion from the settlement.
Meta expects to record a $10 billion legal expense in the third quarter of 2026 related to the settlement. The company generates roughly 98% of its revenue from digital advertising, underscoring the financial significance of the agreement. The settlement also imposes behavioral restrictions on underage users, including default daily screen-time limits of two hours for minors, adjustable only via parental override, and a reduction to one hour if competitors adopt similar mandates.
Additional safeguards include default screen locks between midnight and 6 a.m. for minor accounts, mandatory notification muting during overnight hours and school hours, and the option for underage users to opt for a non-personalized, non-algorithmic feed. The agreement further prohibits cosmetic procedure image filters for teens, hides public reaction counts on minor accounts, and requires age-assurance systems to identify and remove accounts belonging to children under 13.
An independent auditor will oversee compliance, with direct reporting channels to state enforcement officials. The settlement resolves allegations that Meta violated the federal Children's Online Privacy Protection Act by allegedly using minors' data to train machine learning and generative AI models without parental consent.
Meta shares were flat in pre-market trading after rising over 4% earlier, following the announcement of the settlement.
