Meta has agreed to pay up to $18 billion to settle claims brought by 29 U.S. states over children's safety on its platforms, Ars Technica reported. The lawsuit alleged that the company knowingly designed Facebook and Instagram to addict children and collected data from young users without parental knowledge in violation of the Children’s Online Privacy Protection Act. Meta did not admit guilt in the settlement, which avoids a jury trial.
State attorneys general from 52 jurisdictions collaborated with Meta on the agreement, which introduces a set of teen protections scheduled to remain in place for 10 years, pending judicial approval. The company is framing the terms as a call for other platforms to adopt similar rules.
New restrictions for teen accounts
Teens will face a default two-hour daily time limit across both Facebook and Instagram combined. The apps will alert teens at 60 and 90 minutes of daily use and show reminders every 15 minutes to encourage intentional use. Between midnight and 6 AM, a default "Night Mode" will block access to the apps, while a "School Mode" will mute notifications from 8 AM to 3 PM. Direct messages will remain excluded from time limits and muted notification periods.
Users under 18 will also see default blocks on like and reaction counts across their own and others' posts. Meta plans to block teens from using extreme makeup filters, expanding on its prior restrictions against cosmetic surgery filters. In addition, the company committed to funding age-assurance technology to locate accounts belonging to children under 13 or teens registered under adult birthdays.
Competitor conditions and settlement payouts
Payments under the $18 billion agreement will be distributed to states across a 10-year timeline. A 30 percent portion of the total, amounting to roughly $5.3 billion, is contingent on YouTube and TikTok adopting a one-hour daily time limit, Night Mode, age-assurance measures, and matching the $5.3 billion figure.
"Because teens move fluidly across dozens of apps, we need an industry-wide solution," said Meta Chief Legal Officer C.J. Mahoney in a statement calling on TikTok and YouTube to adopt the framework.
Meta will record a $10 billion legal expense in the third quarter of this year to account for the agreement. While the expense will affect quarterly profits, Meta shares rose following the settlement announcement.
