On January 15, Meta Platforms announced it had reached a settlement agreement in a U.S. lawsuit alleging the company designed Facebook and Instagram in ways that are addictive for children, deceived users about safety levels, and collected personal data from minors on its platforms.
Under the agreement, the Silicon Valley-based tech giant will pay up to $16.68 billion to resolve claims brought by a coalition of 29 U.S. states. A trial originally scheduled to last six weeks, starting August 18, is no longer necessary if the court approves the settlement.
In addition to the financial compensation, Meta has committed to a series of nationwide changes to Facebook and Instagram. Specifically, users under 18 will be limited to a maximum of two hours of use per day, and only parents will be able to remove this restriction. The company will also implement a nighttime block for this demographic.
The California Attorney General's office said the company, led by Mark Zuckerberg, will also identify and remove accounts of children under 13 from its platforms.
Meta denied any wrongdoing as part of the settlement but agreed to pay to avoid legal risks. Previously, the company faced up to $1.4 trillion in penalties in this case, while the coalition of states had sought nearly $200 billion in damages.
The settlement comes after Meta suffered a defeat in a similar lawsuit in New Mexico, where a jury ordered the company to pay $375 million in March and an additional $567 million in August. Shortly after the settlement announcement, Meta's shares fell slightly by 0.1% in early trading on Wall Street.
