Meta agrees to pay $18 billion to settle lawsuits over children's social media addiction

Meta, the parent company of Facebook and Instagram, has reached an agreement to pay up to $18 billion over the next decade in order to limit teenagers' usage of its platforms and address claims that the social media giants designed them to addict children. This deal, signed on Wednesday, concludes a federal trial alleging that Meta's products harmed children and that the company misled the public regarding their safety.

Prior to the trial, four states - California, Colorado, Kentucky, and New Jersey - anticipated seeking nearly $200 billion in civil penalties. While Meta will not undergo a substantial overhaul, this settlement signifies a comprehensive effort to dictate how the company serves young users, potentially serving as a model for handling thousands of additional lawsuits against social media companies.

Governments worldwide are grappling with how to curb children's access to harmful online content, as demonstrated by a ban in Australia on social media usage for children under 16. The settlement mandates Meta to restrict teenagers' usage to two hours a day, and block all activity between midnight and 6 a.m. - unless parental consent is given. Additionally, the company will disable most push notifications during school hours (8 a.m. to 3 p.m.) and bolster measures to prevent children from accessing age-restricted content.

However, the settlement does not require Meta to abandon personalized recommendations or targeted advertising, nor does it tackle specific content that Meta researchers identified as particularly problematic, such as posts that may make Instagram users uncomfortable with their body image. Meta maintains that it did not act wrongfully in agreeing to the settlement. The company's total payout amounts to roughly three to four months of profit and about one month of revenue.

Meta CEO Mark Zuckerberg and Instagram head Adam Mosseri had been set to testify in the trial, but the settlement, approved by U.S. District Judge Yvonne Gonzalez Rogers, pre-empted their testimony. The judge described the settlement as a "good step forward" and expressed her contentment at avoiding the need to conclude the trial.