Meta Agreed to $17 Billion Settlement — Company Will Have to Tighten Child Protection Rules

Meta Platforms Agrees to $17 Billion Settlement with Coalition of 29 State Attorneys General

Meta Platforms has agreed to a settlement valued at up to $17 billion in connection with lawsuits filed by a coalition of 29 state attorneys general. The information is reflected in documents filed with the court.

News of the settlement had a positive effect on Meta's stock — the company's securities rose more than 4% in pre-market trading. Investors' reaction suggests that the market views the terms of a multi-year settlement as a more predictable outcome than an uncertain court decision.

The case involved allegations that Meta created Facebook and Instagram platforms in a way that caused addiction for minors and collected children's personal data without parental consent. State attorneys general also argued that Meta used minors' data to train machine learning and generative artificial intelligence models without proper notification and consent from parents.

Under the settlement, Meta's payment obligation could increase to $17 billion over 10 years. The State of California will receive approximately $1.5–$2.1 billion, which will be used for programs to prevent and treat mental health problems related to internet use among young people.

Beyond financial compensation, the settlement also requires Meta to make significant changes to how its platforms operate in relation to minor accounts.

The main provisions of the new rules are:

• Screen time limit: For users under 18, a default daily limit of 2 hours will be set, which only parents can modify. If competitor platforms implement similar restrictions, the limit will be reduced to 1 hour.

• Night restrictions: Minor accounts will be automatically blocked from midnight to 6:00 AM. Notifications will also be turned off from 10:00 PM to 7:00 AM and during standard school hours.

• Disabling algorithmic recommendations: Adolescent users will be able to choose a non-personalized chronological feed that will not be based on algorithmic recommendations.

• Content feature restrictions: Meta will be required to remove cosmetic surgery filters for teenagers, hide the number of public likes and reactions on minor accounts, and implement strict age verification systems to detect and delete accounts of children under 13.

• Independent oversight: Compliance with the settlement will be monitored by an independent auditor who will have broad access to Meta's information and the ability to report directly to relevant state agencies.

Beyond creating significant financial obligations for Meta, the settlement could represent an important precedent for tightening minors' protection standards by social media platforms.