Meta to pay up to $16.7bn in landmark settlement over child safety claims

Meta has agreed to pay as much as $16.68bn to settle a sweeping lawsuit brought by 29 US states accusing the tech giant of designing Facebook and Instagram to hook children; and lying about the damage it was doing.

The deal, struck Wednesday in the middle of a federal trial in California, spares Meta a jury verdict that could have gone much worse. States had floated penalties as high as $1.4 trillion before the trial kicked off; they later signalled they would settle for something closer to $200bn. Meta ended up paying a fraction of either number and admitted no wrongdoing in the process.

As part of the settlement, Meta will roll out daily usage caps and nighttime blackout periods for teens on Facebook and Instagram, plus tighter controls to keep young users away from age-restricted content, nationwide.

A separate slice of the deal, $459.3m, settles privacy claims from California, Illinois, New Mexico and Washington DC tied to the old Cambridge Analytica scandal, where the political consulting firm harvested data from millions of Facebook users without consent.

California Attorney General Rob Bonta, who helped lead the coalition alongside AGs from Colorado, New Jersey and Kentucky, called it a settlement that would make social media safer for kids and force real change “within months.”

Meta’s stock jumped as much as 2.3% on the news before paring gains later in the session.

Thousands of similar lawsuits are pending against Meta, Snapchat, TikTok and YouTube in state and federal courts, all accusing the platforms of engineering addictive features that fuelled a youth mental health crisis. A separate trial over claims from Tennessee is already underway in Nashville, and Meta previously lost a New Mexico case that cost it $375m in damages plus a $567m public-nuisance penalty.