Company vows to make changes to Facebook, Instagram over claims they endanger children

A sign indicates the entrance to Meta's headquarters in Menlo Park in 2025. Meta reached a settlement Wednesday over claims it endangered children with addictive social media platforms. Jason Henry - NYT

By CECILIA KANG AND ELI TAN | THE NEW YORK TIMES

Meta on Wednesday reached a landmark settlement with 47 states, the District of Columbia and U.S. territories, agreeing to pay up to $17.1 billion in penalties and make major changes to its products over claims it endangered children with addictive social media platforms.

In a dramatic capitulation, the owner of Facebook and Instagram agreed to the financial penalties for violating federal child privacy and states' consumer protection laws, the states announced. Meta also agreed to limit how long teenagers can spend on its platforms and to ban features that stoke mental health issues, striking at the heart of the company's business of engagement for advertising.

"The focus of this case was to protect our kids: stopping notifications and alerts at night and when they are in school, encouraging them to take breaks from social media, protecting them against harmful features," Colorado Attorney General Phil Weiser said in a statement. The agreement exceeded what most courts might order, he added.

The settlement effectively ends a bellwether federal trial in the U.S. Northern District of California in Oakland, where California, Colorado, Kentucky and New Jersey were seeking roughly $200 billion over accusations that Meta harmed children. The states filed their agreement with Meta on Wednesday morning in that court, where Judge Yvonne Gonzalez Rogers is expected to approve it.

Separately, Meta said Wednesday that it settled with Texas for about $1 billion over similar allegations. The company still faces numerous other lawsuits from school districts and individuals, some of which are scheduled for trial in the coming months.

Meta's stock price rose 1.3% on the news. The company is valued at $1.47 trillion and most recently generated $60.8 billion in quarterly revenue.

The settlement could signal an inflection point for a social media industry that has largely escaped regulatory scrutiny over the harms its products have caused children. The amount, paid in installments over 10 years, is one of the highest ever reached by a tech company to states.

"Meta wouldn't settle unless it sees the writing on the wall and feels really exposed," said Nora Freeman Engstrom, a law professor at Stanford University.

The full value of Meta's payout depends on whether other social media companies also settle with the states and agree to financial penalties and product changes. Meta will initially pay about $12 billion. It will pay an additional $5 billion if Snap, TikTok and YouTube also settle with the states and agree to financial penalties and product changes.

In a call with reporters Wednesday, Meta's legal team said the company negotiated the terms of its settlement to require the other companies to join, setting industry standards that would not single out Meta.

Meta wants to ensure "teens have a safe and productive experience on our platforms," and it "partnered with state attorneys general to set a new industry standard," C.J. Mahoney, Meta's chief legal officer, wrote in a blog post. He implored other companies to settle.

"This frameworkwill onlywork if all our peers join us," he added. "Because teens move fluidly across dozens of apps, we need an industrywide solution."