Meta agrees to $18B settlement over child safety
What's the story
Meta has agreed to pay $18 billion in a settlement with 29 US states over claims that it endangered children on its platforms, particularly Instagram and Facebook. The lawsuit alleged that Meta had intentionally designed these platforms to be addictive for children, despite being aware of the potential harm they could cause. The company was also accused of collecting data from minors without parental knowledge, violating the Children's Online Privacy Protection Act (COPPA).
Safety measures
Settlement doesn't mean acceptance of guilt
The settlement does not mean Meta has accepted guilt, but it avoids a jury trial.
The company is using this opportunity to call on platforms like YouTube and TikTok to adopt similar safety measures for teens.
These include a two-hour daily screen time limit across Facebook and Instagram, blocking access from midnight to 6am (Night Mode), and muting notifications during school hours (from 8:00am to 3:00pm).
The DMs won't be included in the time limits or muted notification periods.
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Age-assurance technology and other restrictions
Meta will also prevent teens from using what it calls "extreme makeup filters," expanding on its existing restrictions against cosmetic surgery filters.
The company is further investing in age-assurance technology to proactively detect accounts that may belong to users under 13, as well as accounts that appear to belong to teens but were created using an adult's birth date.
The new safety measures, which were developed with input from 52 state attorneys general, will remain in place for a decade.
Compliance conditions
YouTube, TikTok must implement similar protections for minors
Meta's $18 billion settlement will be paid to states over 10 years, but 30% of it, around $5.3 billion, will only be paid if YouTube and TikTok implement similar protections.
These include a one-hour daily screen time limit, Night Mode, and age-assurance measures.
The platforms must also agree to pay an amount equal to the 30% figure.
Information
Meta's stock has seen an uptick following settlement announcement
Meta has said it will incur a $10 billion legal expense in Q3 2026, which will affect the company's expenses and profit. However, despite this news, Meta's stock has seen an uptick following the announcement of the settlement.