Meta settles for $18 billion in lawsuit brought by 29 states over social media harms to children

Key Points:

• Meta has agreed to pay up to $18 billion to settle claims from 29 U.S. states alleging the company knowingly designed platforms like Instagram and Facebook to addict children and violated the Children’s Online Privacy Protection Act (COPPA) by collecting data without parental consent.
• The settlement includes a proposed set of protections for teens on Meta’s platforms, such as default daily time limits, nighttime and school mode restrictions, blocking of likes and reactions visibility, and limits on extreme makeup filters, pending judicial approval.
• Meta will invest in age assurance technology to better identify underage users and prevent adults from interacting with teens, while also enhancing parental controls and improving responses to harmful content reports.
• About 30% of the settlement funds, approximately $5.3 billion, will only be paid if YouTube and TikTok adopt similar protective measures, with these platforms also agreeing to pay a matching amount, highlighting Meta’s call for an industry-wide solution.
• Meta plans to record a $10 billion legal expense in the third quarter, which will affect its financials, but the company’s stock price increased following the settlement announcement.