Meta Settles Youth Addiction Lawsuits for Up to $18 Billion

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. The litigation alleged that Meta designed Facebook and Instagram with addictive features—such as infinite scroll and autoplay—that contributed to youth anxiety, depression, and suicide, while violating federal child privacy laws.

As part of the agreement, Meta will implement sweeping safety guardrails for users under 18, including a default two-hour daily time limit, a "Night Mode" block from midnight to 6 a.m., and silenced notifications during school hours. The company will also remove beauty filters and "like" counts for minors, enhance age verification, and appoint an independent auditor to monitor compliance for five years. While Meta denies any wrongdoing, it will distribute the funds over a decade to support youth mental health and digital literacy.

During the trial, Instagram head Adam Mosseri testified that the "Take a Break" feature had adoption rates as low as 1.8 percent in 2021 because most teenagers did not want it. Former employees also testified that the company prioritized profits over user well-being. The final payout varies by report, with some citing $16.7 billion and others up to $18.1 billion; approximately $5.3 billion of the total is contingent upon TikTok and YouTube adopting similar safety frameworks and making matching payments.

Market reaction was volatile. Meta shares initially rose 5% in pre-market trading but erased those gains shortly after the market opened, finishing the session in negative territory.