Meta Platforms has agreed to pay up to $16.68 billion to settle a sweeping legal challenge brought by US states over allegations that Facebook and Instagram were designed to encourage addictive use among children, misled consumers about platform safety and improperly collected personal data from underage users.
The agreement brings an early end to a closely watched federal trial in Oakland, California, involving claims initially brought by 29 states. The broader settlement covers claims involving 47 states and several US territories, according to state officials. The deal is subject to the terms of the court proceedings and resolves a major test of the legal responsibility of social media platforms for alleged harm to young users.
Beyond the financial settlement, Meta will be required to make significant changes to how teenagers use Facebook and Instagram in the US. The measures include default daily usage limits, restrictions on overnight access, enhanced parental supervision tools and stronger age-assurance mechanisms aimed at identifying users under 18 and removing children under 13 from the platforms.
The settlement also requires Meta to maintain and improve existing teen safety measures and subjects the company to independent oversight. An independent auditor will have access to information and resources to assess compliance, while Meta will face restrictions on making misleading or deceptive statements about the safety of its services.
California Attorney General Rob Bonta described the agreement as a significant step towards reducing the risks faced by young users, saying it would “make social media less dangerous for our kids” and involve “massive transformations” to Meta’s platforms within months.
The underlying litigation alleged that Meta knowingly used product features intended to drive prolonged engagement among children and teenagers while understating the risks associated with its services. The states also accused the company of violating the federal Children’s Online Privacy Protection Act (COPPA) by collecting information from children without the required parental notification or consent.
According to the allegations, information gathered from underage users was also used in connection with machine-learning and generative AI systems. Meta has denied the claims and maintained that it has taken steps to protect young people on its platforms.
The company had argued during the litigation that it could not have deceived consumers by describing its services as addictive because social media addiction is not recognised as a psychiatric disorder. Meta also rejected the allegations that it deliberately designed Facebook and Instagram to harm children.
The scale of the potential financial exposure had made the case particularly significant. Before the settlement, Meta said the four states leading the consumer-protection claims were seeking penalties that could reach $1.4 trillion. The states had previously suggested a figure closer to $200 billion, while also seeking additional damages and court-ordered changes to the platforms.
The settlement therefore removes a substantial element of legal uncertainty for Meta, while imposing financial and operational costs that extend beyond the immediate litigation. The company has not admitted wrongdoing as part of the agreement.
The case is also part of a much wider legal battle over the design of social media products and their impact on children. Meta, Snap, Alphabet’s YouTube and ByteDance’s TikTok continue to face thousands of lawsuits in federal and state courts alleging that their platforms were designed with features that encourage compulsive or addictive use among young people.
The federal cases have been consolidated before US District Judge Yvonne Gonzalez Rogers in Oakland and involve claims brought by individual users, families, school districts and state governments. Separately, states have pursued their own cases in state courts.
For Meta, the settlement marks a major shift from defending the design and safety of its platforms in court to accepting enforceable changes in how its services operate for younger users. It also raises the prospect of greater scrutiny of similar engagement-driven features across the wider social media industry.
The agreement comes after Meta suffered setbacks in other youth-safety litigation, including a separate New Mexico case that resulted in significant financial penalties and mandated changes to the company’s approach to protecting young users.
While the settlement resolves a major portion of the states’ litigation, the broader legal and regulatory debate over children’s access to social media remains far from settled. The continuing cases against Meta and other major platforms could further shape how technology companies design, moderate and monetise services used by children and teenagers.
