Meta Platforms reached a settlement to pay up to $16.68 billion to resolve claims by 29 US states that the company designed Facebook and Instagram to addict children, misled consumers on safety, and improperly collected children's personal data [1, 2, 3, 4]. Including a separate $1 billion deal with Texas, the total payout could approach $18 billion [5].

The settlement also covers lawsuits from California, Illinois, New Mexico, and Washington D.C. over privacy violations related to the Cambridge Analytica scandal [1, 2, 3]. Virginia alone will receive $353 million as part of the agreement—one of the largest payouts in the state’s history [6].

As part of the deal, Meta must limit under-18 users to two hours of daily usage, silence notifications from midnight to 6 a.m., mute alerts during school hours, and strengthen protections against access to age-restricted content on its platforms [1, 2, 5, 4]. Meta will remove infinite scrolling and restrict nighttime notifications for minors [7].

The settlement requires court approval and ends a federal trial that started August 18 in Oakland, California [1, 2, 8, 9, 4]. Meta denies any wrongdoing, stating "social media addiction" is not a recognized psychiatric condition and refuting claims it misled consumers [1, 2, 10, 3, 4]. Meta’s Chief Legal Officer C.J. Mahoney called the agreement "the right path forward for our whole industry," adding the framework would only work if other firms joined [11].

Plaintiffs allege Meta violated the federal Children’s Online Privacy Protection Act by collecting data from children without parental consent and using it to train AI models [1, 2, 10, 3]. The settlement includes a clause to reduce payments by $5 billion if other major firms such as Snapchat and TikTok reject similar terms [7, 5, 12]. Hawaii’s Attorney General said she "hopes" these rivals will enter similar deals [11].

Meta’s shares rose 1-5% in early trading after the news [1, 2, 7, 5, 9]. The company’s 2025 net income of about $60.46 billion makes the settlement a manageable penalty [7].

Virginia Attorney General Jay Jones said, "For years, Meta intentionally deceived the public about the addictive and harmful design features," and said the settlement will protect children from harm [6]. Meta stated, "Ensuring teens have a safe and productive experience is an absolute imperative," and called the deal a new industry standard [6].

The next step is court approval of the pact following the trial conclusion last week.