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In a blockbuster settlement, Meta has agreed to pay up to $17.1 billion and overhaul how Instagram and Facebook work. The settlement resolves claims from 47 states, the District of Columbia and U.S. territories that Meta’s platforms were designed to be addictive and harmful to children, reports the New York Times.
The company will pay about $12 billion upfront, with the total rising to $17.1 billion if Snap, TikTok and YouTube also settle and agree to similar penalties and changes. It’s one of the largest settlements ever paid by a tech company.
Meta will make major changes to its platform, including imposing two-hour daily time limits on Instagram and Facebook for teens, restricting usage between midnight and 6 a.m. and silencing notifications between 10 p.m. and 7 a.m., when people are sleeping. It’s also limiting features linked to negative social comparison, like beauty filters and visible like counts, and strengthening age verification and parental controls.
“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 settlement ends a federal bellwether trial in Oakland where four states were seeking roughly $200 billion, and comes as Meta faces mounting legal pressure. The company spent about $2 billion on legal challenges in a single quarter this year, and a New Mexico judge separately ordered it to pay nearly $1 billion in a related case this month. Meta still faces numerous other lawsuits, some headed to trial in the coming months.