Meta settles social media addiction case for $16.7 billion

Meta and a coalition of state attorneys general have settled a major federal case centering on allegations that the social media giant misrepresented the extent of child-related mental health harms caused by apps like Facebook and Instagram.

The settlement was revealed in a court filing released Wednesday that details several requirements Meta must make to its apps as part of a proposed “consent judgement.”

Those changes include daily usage limits and “nighttime blocks” for teenagers that use the company’s apps like Facebook and Instagram, “enhanced age assurance measures” that would prevent children from using the apps, and the creation of additional tools for parents and guardians.

As part of the settlement, Meta agreed to pay $16.7 billion. The state of California could receive $1.5 billion to $2.1 billion if the court officially approves the settlement, according to an announcement by California Attorney General Rob Bonta. Texas was not part of the group settlement and agreed to a $1 billion payment separately.

“Today, we have secured a settlement with Meta that will make social media less dangerous for our kids and make a world of a difference for children and their families,” Bonta said in a statement. “Meta has agreed to make massive transformations that will reduce the risk of harm from its platforms — and will do it within months.”

Several state AG’s touted a $17.1 billion settlement amount. That number includes more than $459 million for claims related to the Cambridge Analytica case, which was separate from the child safety case.

Each party waived “all rights to appeal this Final Judgment,” the filing states.

Shares of the social media giant popped during premarket trading after the news broke, but were little change in early trading.

The trial, which is in its second week, is being held at the Oakland federal courthouse. The trial was co-led by Bonta and the AGs from Colorado, New Jersey and Kentucky, who represented a bipartisan group of 29 AGs in a combined case stemming from a 2023 lawsuit.

In Bonta’s announcement detailing the settlement on Wednesday, he noted that the effort involved a “bipartisan coalition of 51 attorneys general.”

Meta said in a statement that the settlement agreement “includes a payment of approximately $18 billion,” which will be “distributed in annual installments over a 10-year period.” That financial amount is to fund various youth online safety initiatives as deemed by the states.

The total payment also includes the separate settlement with Texas for $1 billion.

The company said that “participating states” will receive about $12.7 billion, or 70%, of the total settlement payment over the next 10 years. Those states can receive the remaining $5.3 billion, or 30%, as long as Google‘s YouTube and TikTok implement certain app changes, such as daily time limits for youth, age-assurance measures, and a “night mode.” Meta’s rivals must also agree to all pay an amount that matches the remaining 30%, “with half of the…