Meta Settles Child-Safety Lawsuit with $17.1 Billion Payment Over Decade
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Meta agreed to pay up to $17.1 billion over the next decade to settle a landmark child-safety lawsuit brought about by 29 state Attorneys General, co-led by California’s Rob Bonta. The suit alleged Meta designed Instagram with intentionally addictive features and exposed younger users to serious mental harms while misleading the public about the platform’s safety. In addition to the payout, the social media company will make sweeping changes to its platform, including a default two-hour daily time limit on Facebook and Instagram for under-18 users, and will bring on an independent auditor.
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Washington Times BusinessOAKLAND, Calif. — Meta has agreed to pay $17 billion and add child-safety measures to its Facebook and Instagram platforms to end a landmark trial over teen social media addiction and settle claims filed by 47 states, state attorneys general announced Wednesday.
CNBCMeta Platforms shares are holding onto slight gains after the company announced it reached a proposed settlement with 52 state and U.S. territory attorneys general over its social media addiction cases. Jim Cramer called this a "big win" for Meta earlier this morning, noting the potential fines could have been much larger, and litigation could have lasted for a very long time. That's why he argued the stock should trade higher on the news. Equally as important, the new protections for teens and stronger parental controls that were announced shouldn't materially impact the company's products or business model. Analysts at Piper Sandler estimated in their reaction to the settlement that these changes will impact roughly 0.5% of Meta's global users.
MarketWatchThe settlement came during the second week of a California federal trial over claims brought by a coalition of 29 states that accused Meta META of designing Facebook and Instagram to “entice, engage and ultimately ensnare” children. Meta was also accused of misleading the public over the safety of its platforms and improperly collecting the personal data of children who used its services.
BBC BusinessPublished Social media giant Meta has reached a settlement with US states and territories to resolve a court case related to child safety on Facebook and Instagram.
New York Post BusinessThe $18 billion settlement was announced just days into a historic trial brought by the coalition of state attorneys general, who accused Meta of getting kids hooked on social media and ignoring harms like anxiety, depression and even suicide to protect their profits.
ZeroHedgeAs part of the settlement, Meta must implement daily usage limits and 'nighttime blocks' for teenagers who use the company's apps like Facebook and Instagram, as well as "enhanced age assurance measures" that would prevent children from using them, and also providing parents with additional tools, CNBC reports.
JacobinPerhaps the most important trial — and test — will be an action launched by California, Colorado, Kentucky and New Jersey, which began last week. The states, which are seeking $200 billion in damages, argue that Meta and its platforms are addictive, targeted at children, and in violation of privacy and consumer protection laws. Meta, of course, maintains its innocence.
Financial TimesMeta to pay up to $16.7bn to settle children’s social media harm case Case relating to alleged failures of child protection was getting under way in California
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While the four states in the Oakland trial did not officially say how much they had been seeking, Meta said in a court filing that financial penalties in the case could amount to as much as $1.4 trillion - a figure legal experts said was unlikely, if not impossible.
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FortuneThe company denied wrongdoing and it previously argued the states’ financial demands were “vastly disproportionate,” and in pretrial filings warned that the states’ own damages framework could theoretically produce penalties as high as $1.4 trillion—a figure close to Meta’s entire market capitalization. The states’ lawyers had signaled roughly $200 billion was a more realistic target at trial.
ZeroHedgePrior to the settlement, Meta warned that maximum statutory penalties could theoretically reach $1.4 trillion, while the attorneys general have indicated they may seek around $200 billion.
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Discussing Instagram’s “take a break” feature, Volichenko said his team had argued it should be automatically turned on for younger teens who use Instagram. That’s because people are far more likely to use a feature if it is “opt-out” — that is, they need to manually turn it off if they don’t want to use it — rather than “opt-in,” which means they have to manually turn it on.
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Washington Times BusinessJason Slothouber, a senior prosecutor for the Colorado Attorney General’s Office, pressed Mosseri on the low adoption rate among teens for the “take a break” feature, which prompts users to step away if they’ve been scrolling a while. Very few teens used the feature when Instagram first introduced it, but since launching separate teen accounts in 2024, Meta has made it the default setting for teenage users.
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02 BBC Business Published Meta's decision to settle the case on Wednesday came as a surprise. I was expecting weeks of courtroom drama as 29 states – almost two-thirds of North America - took on one US tech giant.
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03 New York Post Business Interestingly, the settlement is structured to create incentives for the 52 state attorneys general to reach similar deals with rival social networks.
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04 Fortune Meta is not actually committing to pay the $17.1 billion figure attached to this week’s child safety settlement, at least not on its own.
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05 Washington Times Business In earlier testimony at the Oakland trial, Francesco Fogu, Instagram’s director of product design, had contentious exchanges with the plaintiffs’ lawyer over internal chats and documents shown to the jury. In one instance, jurors were shown a passage from a document saying, “As a company, we make different choices when it comes to regulatory response. Sometimes we don’t comply and accept a fine. Sometimes we comply in the most minimal or literal way possible.”
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06 Jacobin A series of trials in the United States involving social media giant Meta could cost the tech behemoth over $1 trillion in fines and reshape social media. The efforts are a reminder that our collective capacity to regulate harms can be slow, lumbering, and imperfect, but occasionally successful. Sometimes nature heals itself. We should celebrate that.
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07 CNBC Meta shares rallied in early trading Wednesday on the settlement news and were up about 1.5% in late day trading, rising above $578.
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08 MarketWatch Tech Stocks Meta’s stock rises as the company settles case in social-media addiction trial
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