Meta’s $16.68 Bn Child Safety Settlement: What Facebook, Instagram Must Change

Meta Platforms has agreed to pay a maximum of $16.68 billion to settle claims brought by states alleging that Facebook and Instagram were designed to addict children, misled users about their safety and improperly collected children's personal data, according to a Reuters report.

The settlement was reached during a federal trial in California involving claims from 29 states, bringing an end to one of the most closely watched cases involving allegations that social media platforms have harmed young users. Meta denied wrongdoing as part of the settlement.

Under the agreement, Meta will also make changes to Facebook and Instagram for teenage users across the US. These measures include daily usage limits and nighttime blocks, according to court papers.

What Did States Accuse Meta Of?

The federal trial involved claims from California, Colorado, Kentucky and New Jersey that Meta had violated state consumer protection laws. The case also included claims from 29 states that Meta violated the federal Children's Online Privacy Protection Act (COPPA).

The states alleged that Meta collected personal information from users it knew were children without obtaining parental notification or consent. They also alleged that the company used children's data to train machine learning and generative AI models.

Meta denied the allegations and said it had worked to protect children on its platforms. The company had also argued that it could not have misled consumers about whether its services were addictive because “social media addiction” is not a recognised psychiatric condition.

Before the trial, Meta said four states were seeking up to $1.4 trillion in penalties. The states later indicated that the figure would be closer to $200 billion, while also seeking additional damages and court orders requiring major changes to Meta's platforms.

Meta Faces Wider Wave Of Youth Safety Lawsuits

The settlement resolves one major case, but Meta and other social media companies continue to face thousands of lawsuits over alleged harm to children and teenagers.

Meta, Snap, Alphabet's YouTube and TikTok parent ByteDance are facing cases in federal and state courts alleging that they knowingly designed features that could encourage addictive use among young people. Around 30 states have separately filed lawsuits against the companies in state courts.

Meta's latest settlement also follows setbacks in other child-safety cases. In March, a jury ordered the company to pay $375 million in a New Mexico case after finding that it had misled consumers about the safety of its platforms. On August 6, a judge found Meta had created a public nuisance and ordered it to pay another $567 million and implement youth-safety measures.

Earlier in March, a Los Angeles jury also found Meta and Google liable for a plaintiff's depression and anxiety in the first trial involving an individual's claims against the companies. The companies were ordered to pay a combined $6 million in damages and have said they will appeal.

The settlement therefore removes one major federal trial from Meta's legal challenges, but the company continues to face litigation over the safety of its platforms and their impact on young users.