Meta has agreed to pay up to $16.68 billion and to introduce significant restrictions for teenage users of Facebook and Instagram. The agreement ends a lawsuit in which several U.S. states accused the company of designing its platforms to create addiction among children.
The agreement, which needs court approval, includes limiting the time spent daily on the platforms, blocking access at night, and stopping notifications during school hours. Meta will also have to strengthen age verification, parental controls, and measures to prevent teenagers from seeing adult content, Reuters reports.
However, the company has not admitted guilt and continues to deny the accusations made against it.
Up to two hours per day
One of the most important changes is the introduction of an implicit limit of two hours per day for teenagers. Messaging and certain longer video materials will not be included in the calculation.
Facebook and Instagram will be blocked for minors at night, and notifications will be turned off both at night and during school hours. Parents will be able to adjust some of these settings.
Teenagers will be able to stop personalized recommendations in their feeds, and Meta will limit the display of reactions and the number of likes to reduce social comparison pressure.
The company will also restrict filters that promote cosmetic interventions and will introduce warnings and breaks after certain periods of use. Compliance with the agreement will be verified by an independent auditor, and the new measures are expected to be implemented within a year of the agreement's approval.
Accusations regarding addiction and data collection
The federal trial in Oakland, California, targeted accusations made by California, Colorado, Kentucky, and New Jersey, alleging that Meta violated state consumer protection laws.
Meanwhile, 29 states claimed that Meta violated the federal law on children's online privacy protection. The company allegedly collected data from users it knew were under 13 years old without informing parents or obtaining their consent.
According to the accusations, children's data was used, including for training certain machine learning models and generative artificial intelligence.
States also argued that Facebook and Instagram were built with features intended to keep children connected for as long as possible and that Meta downplayed the platforms' risks to mental health.
Meta has repeatedly stated that it could not mislead the public about an alleged "social media addiction" as it is not officially recognized as a psychiatric condition.
Maximum sum depends on Meta's rivals
Most of the agreement will be paid over ten years. Part of the maximum sum is conditioned on Meta's rivals, including TikTok, YouTube, and Snap, adopting similar measures.
Prior to the trial, Meta argued that four states were seeking penalties that could reach $1.4 trillion. However, they estimated that sanctions would rather approach $200 billion.
The agreement also resolves separate lawsuits filed by California, Illinois, New Mexico, and Washington, D.C., in the Cambridge Analytica scandal. The consulting firm had obtained personal data from millions of Facebook users. For these litigations, the states will receive a total of $459.3 million.
Thousands of lawsuits continue
The agreement does not resolve all of the company's legal issues. Meta, Snap, Google, and TikTok's owner, ByteDance, still face thousands of actions brought by families, school districts, and local authorities.
Plaintiffs accuse the platforms of exacerbating depression, anxiety, eating disorders, and self-harming behaviors among children and teenagers.
Earlier this year, Meta lost two stages of a lawsuit brought by the state of New Mexico and was ordered to pay a total of $942 million. The company announced it would challenge the decisions.
Also in March, a jury in Los Angeles found that Meta and Google contributed to a young woman's depression and anxiety and ordered them to pay a total of $6 million in damages. This verdict will also be challenged.
Meta's shares rose by 2.3% at the opening of the trading session following the announcement of the agreement.