Meta settles multistate social media lawsuit for $16.7 billion

Meta, the parent company of Facebook and Instagram, has reached a staggering $16.68 billion settlement to address claims that its social media platforms contributed to harm in children's mental health. As part of this agreement, the company will impose strict usage limits for teenage users and enforce nighttime blocks on their platforms. The settlement, which spans a decade, covers nearly all US states and represents a significant effort to redefine how Meta serves young users.

Colorado Attorney General Phil Weiser hailed the settlement as "very meaningful and well beyond what any court has ordered or is likely to order." The deal obliges Meta to limit teenage users to two hours of daily usage on Facebook and Instagram, with all access blocked from midnight to 6am unless parental consent is provided. This restriction could be tightened if competitors like Snapchat, TikTok, and YouTube adopt similar measures.

Meta will also disable most push notifications during school hours (8am to 3pm) and enhance 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 directly address certain problematic content, such as posts that may negatively impact body image.

The total payout of about $16.7 billion is roughly equivalent to three to four months of Meta's profit and one month of its revenue. While Meta has denied any wrongdoing, the company acknowledged the importance of ensuring teens have a safe and productive experience on its platforms. Meta shares rose up to 4.1%, but closed up 1.1%.