Meta Reaches $18 Billion Settlement With 48 States Over Child-Safety Claims

Meta META 2.05%increase; green up pointing triangle Platforms agreed to an $18 billion settlement with 48 state attorneys general, bringing an end to a massive federal trial over social media’s harm to teenagers and ushering in a new era of tech companies having legal responsibility for their platforms.

As part of the settlement agreement, Meta will also make sweeping changes to its services, Facebook and Instagram, including implementing a default two-hour time limit on its apps for users under 18.

In a unique setup, Meta will pay out only 70% of the settlement unless TikTok and YouTube, which is owned by Alphabet, also agree to set default one-hour time limits a day on their apps for underage users and each pay the states roughly $5.3 billion. Meta will only pay the remaining 30% of its settlement, also $5.3 billion, if the two other companies agree to the terms.

The settlement will be distributed to the signing states in annual installments over a 10-year period based on their populations. It includes 48 states and four U.S. jurisdictions: the District of Columbia, Puerto Rico, American Samoa and Northern Mariana Islands. New Mexico, which sued Meta in a similar trial this spring and won, and Florida aren’t currently part of the settlement.

Other agreed platform changes include launching “night mode,” a default block on its apps between midnight and 6 a.m. and a “school mode” disabling push notifications during school hours of 8 a.m. to 3 p.m. for underage users. The settings can only be changed with a parent’s permission.

“The relief we are getting in this settlement is very meaningful,” said Colorado Attorney General Phil Weiser who co-led settlement negotiations. “Today’s action is an important step forward and I welcome Meta’s decision to accept responsibility and to collaborate with the multistate coalition to protect kids who deserve better.”

In an interview, Meta’s legal chief, C.J. Mahoney, said, “What we have now for the first time is alignment between one of the major social-media platforms and regulators from all over the country about how to deal with this issue.”

YouTube didn’t immediately provide a comment. TikTok didn’t immediately respond to a request for comment.

The settlement, which needs to be approved by a federal judge, halts a trial that was ongoing as recently as Tuesday. That case, brought by the state attorneys general of California, Kentucky, New Jersey and Colorado, alleged that Meta violated their states’ consumer-protection laws and also the federal Children’s Online Privacy Protection Act of 1998, commonly known as COPPA, by knowingly making its platforms addictive and going after young users.

The trial, which was taking place in Oakland, Calif., was in its second week and Adam Mosseri, the head of Instagram, had begun testifying Tuesday. Meta Chief Executive Mark Zuckerberg had also been expected to testify.

The AGs in that case had asked for roughly $200 billion in damages, more than 200 times the amount that Meta was recently ordered to pay after losing a similar child-safety trial in New Mexico.

In that case, brought by New Mexico’s attorney general, Meta was ordered to pay $375 million in civil penalties, create a $567 million abatement fund to rectify harms toward New Mexico youth and make changes to its apps similar to those in the settlement, including limiting when it can send push notifications to users under 18.

The company is still facing thousands of lawsuits that have been filed by school districts and individual plaintiffs alleging social-media harms. The suits are aimed at holding it accountable for the design of its products, Instagram and Facebook, via a novel legal product-liability argument.

Previous plaintiffs have tried to sue Meta over the content that is shown on its apps, but courts have found the company broadly immune under federal law to liability for user-generated material.

So far, Meta had lost two major cases this year: the one in New Mexico and another in Los Angeles brought by a 20-year-old woman. It settled one case with a Kentucky school district, and another case, brought by Tennessee’s state attorney general, had previously been playing out in state court before the AGs reached a settlement Wednesday.

In the Los Angeles trial, Meta and Google’s YouTube were jointly ordered to pay the plaintiff $6 million. Two individual plaintiffs recently dropped their cases before they reached trial without receiving financial settlements from Meta.