Meta Agrees to $18 Billion Settlement Over Youth Social Media Addiction Claims

Meta Platforms has agreed to pay up to $18 billion and introduce sweeping new restrictions on how teenagers use Facebook and Instagram under settlements with almost every US state.

The agreement resolves allegations that Meta deliberately designed its platforms to encourage addictive use among children, misled the public about safety risks and improperly collected personal information from young users.

The settlement brings to a halt a federal trial that began on August 18 and was expected to continue for six weeks. US District Judge Yvonne Gonzalez Rogers has suspended the proceedings while she reviews the agreement and indicated that she is likely to approve it.

The deal involves 48 US states, Washington, DC and several US territories, with a maximum combined payment of about $17.7 billion. California is expected to receive approximately $2.2 billion, while New York and Texas could each receive more than $1 billion.

Meta has guaranteed payments of about $12.7 billion, with a further $5 billion dependent on whether Snapchat, TikTok and YouTube introduce comparable protections for young users.

Under the agreement, teenagers will face a two-hour daily limit on Facebook and Instagram use over the next decade. The restriction can be overridden by parents, while access will be blocked between midnight and 6am unless parental permission is given.

Meta will also reduce most push notifications to teenagers during school hours, between 8am and 3pm, and strengthen measures designed to prevent children from accessing age-restricted material.

The company will hide likes and reaction counts from users under 18 and remove filters that promote cosmetic procedures. Teenagers will also have the option of using a non-personalised feed rather than relying on algorithmically recommended content.

The restrictions could become even tighter if other major social media companies agree to adopt similar measures. Meta has urged TikTok, YouTube and Snapchat to introduce the same framework, arguing that teenagers routinely move between multiple platforms.

California Attorney General Rob Bonta said the settlement would bring major changes to the way young people interact with social media, including limits on usage, overnight blocks, reduced notifications during school and restrictions on certain filters.

The agreement does not require Meta to eliminate personalised recommendations or targeted advertising, meaning the company's core business model will remain largely intact.

Meta denied wrongdoing as part of the settlement and said protecting teenagers was a priority.

"Ensuring teens have a safe and productive experience on our platforms is an absolute imperative for Meta," the company said.

The company will make the payments over a 10-year period. It also faces approximately $10 billion in legal costs, according to the settlement terms.

The agreement includes a separate payment of $459 million to resolve state privacy claims linked to the Cambridge Analytica scandal, in which personal information belonging to millions of Facebook users was collected without authorisation.

The states had argued that Meta could face as much as $1.4 trillion in civil penalties, while four states - California, Colorado, Kentucky and New Jersey - had been seeking penalties approaching $200 billion.

The settlement follows two significant defeats for Meta in New Mexico, where juries ordered the company to pay $375 million in March and a further $567 million in August over allegations concerning the impact of its platforms on children.

The agreement could also provide a model for resolving thousands of other lawsuits against social media companies, as governments around the world intensify efforts to restrict children's exposure to potentially harmful online content.

Judge Gonzalez Rogers described the settlement as "a good step forward" during Wednesday's hearing and said she expected to approve it after completing her review.

Meta shares initially fell in early Wall Street trading before recovering and moving higher later in the session.