Meta Agrees to $18 Billion Settlement Over Youth Addiction

Following a federal trial in Oakland, Meta Platforms Inc. agreed to a landmark settlement of up to $18 billion to resolve lawsuits brought by a bipartisan coalition of 52 U.S. jurisdictions, including 48 states, the District of Columbia, and several territories. The litigation alleged that Meta designed Facebook and Instagram with addictive features that harmed youth mental health and violated federal child privacy laws by collecting data from users under 13.

Under the agreement, Meta will implement sweeping safety guardrails for users under 18, including a default two-hour daily time limit, a nighttime block from midnight to 6 a.m., and muted notifications during school hours. The company will also remove like counts and beauty filters for minors, enhance age verification, and appoint an independent auditor to monitor compliance for five years. Meta denies any wrongdoing, but the settlement averts further trial risk and the expected testimony of CEO Mark Zuckerberg.

Financial terms vary across reports, with a base payout of approximately $12.7 billion to $16.7 billion distributed over a decade, potentially reaching $18 billion if competitors like TikTok and YouTube adopt similar frameworks and make matching payments. While most states joined the pact, Florida rejected the terms as insufficient, and New Mexico remained separate following a previous court order requiring Meta to pay hundreds of millions in damages.

Market reaction was volatile; Meta shares initially rose on the news before erasing gains. The company expects to record a $10 billion legal expense in the third quarter of fiscal 2026.