addiction

Aug. 26 (UPI) — Meta agreed to pay up to $18 billion to 48 states, the District of Columbia and three U.S. territories on Wednesday, in settlements resolving lawsuits over the mental health risks its social media platforms pose to children as well as spearate privacy claims.

Court filings state that the settlements, pending judicial approval, include payments of $16.68 billion to 51 U.S. jurisdictions, more than $1 billion to Texas and another $459 million to 46 states, Puerto Rico and Northern Mariana Islands to resolve privacy claims tied to the 2018 Cambridge Analytica data scandal.

The filings also state that Meta must implement safeguards on its platform for minors, including limits on daily use, blocking access at night, more parental tools, stricter age-assurance standards, the hiding of likes on posts and banning cosmetic-procedure filters, among other measures.

California Attorney General Rob Bonta announced that his state may receive between $1.5 billion and $2.1 billion in the settlement.

“Today, we have secured a settlement with Meta that will make social media less dangerous for our kids and make a world of 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.”

Meta said that 70% of the funds will be distributed over a 10-year period, with the remaining 30% to be released only after Alphabet-owned YouTube and ByteDance’s TikTok implement a one-hour dayily limit, night mode and age-assurance measures as well as each pay a matching $5.3 billion.

The Mark Zuckerberg-led Meta said the structure was designed to enforce an industry-wide adoption of the measures it has agreed to and ensure teens receive the same level of protection across major social media platforms.

“Because teens move fluidly across dozens of apps, we need an industry-wide solution. We therefore call on our industry peers, TikTok and YouTube, to implement this new framework, right away,” C.J. Mahoney, chief legal officer at Meta, said in a statement.

As part of the settlement, all parties, including Meta, waive all rights to appeal the final judgment.

“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,” Phil Weiser, Colorado attorney general, said in a statement.

The cases brought by U.S. states are among several across the globe investigating social media companies over the harms they pose to children. Elsewhere, countries, such as Australia, have implemented age restrictions and called for the end to addictive features that encourage compulsive use, such as endless scrolling.

Meta still faces additional lawsuits in the United States still. Several school districts and individuals have filed lawsuits against Meta and other social media platforms for contributing to mental health problems among children.

Meta settles $16.68bn lawsuit over child addiction claims, agreeing to major changes in Facebook and Instagram features.

Meta Platforms has agreed to settle a lawsuit that accused the company of designing Facebook and Instagram in a way that addicted children, misled consumers about safety, and collected personal data of children on the platform.

On Wednesday, the social media giant agreed to pay a maximum of $16.68bn as part of a settlement to resolve claims brought in the United States case, championed by a coalition of 29 US states. The case, which started on August 18, was expected to last six weeks.

Meta, based in Silicon Valley in California, has also agreed to make changes to Facebook and Instagram nationwide as part of the settlement. Among these are daily usage limits of two hours for those under the age of 18, which can only be removed by a parent, and nighttime blocks.

The California State Attorney General’s Office said that the Mark Zuckerberg-led company would also identify and remove children under the age of 13 from the platform.

Meta denied any wrongdoing as part of the settlement, which still needs court approval. It had faced up to $1.4 trillion in fines in the case, but the coalition had been seeking a penalty closer to $200bn.

The settlement comes after a loss in a comparable landmark case in New Mexico, where a jury ordered Meta to pay $375m in March and another $567m in August.

Meta’s stock tumbled in early trading on Wall Street, down 0.1 percent since the market opened.

Social media giant Meta is facing a landmark trial that could impact its future.

Opening statements began on Tuesday in a US federal court case brought by 29 state attorneys general, who have accused Facebook and Instagram’s parent company of designing platforms to encourage infinite scrolling and keep their youngest users hooked, despite allegedly knowing they could fuel addictive behaviour. The company is also accused of collecting data on minors.

The case is expected to last as long as six weeks. If the attorneys general get their way, the Silicon Valley-based tech company might have to make structural changes to its platform and pay as much as $1.4 trillion in fines.

While Meta denies the allegations, the potential consequences of this case could be significant for the company, which is already facing low employee morale, waves of layoffs and a series of lagging investments.

Significant financial impact

The potential exposure to Meta is significant. State penalties could reach as high as $1.4 trillion, Meta has said, although that is unlikely, as the coalition of states said it is seeking $200bn in damages.

To put that in context, the amount is roughly the equivalent of Meta’s revenue last year. In 2025, the tech giant generated nearly $201bn in revenue, and it had $83.2bn in operating income.

The $200bn ask is significantly higher than any penalty the company has had to face so far. In March, a jury in a separate New Mexico lawsuit ordered Meta to pay $375m in civil penalties, and another $567m was ordered by a judge earlier this month.

At the time of the March penalty, financial services firm Morningstar said it was not overly concerned about the impact of the looming court cases on Meta’s valuation, even if governments around the world use these cases as a reason to push for structural changes to the business.

“We think that any algorithmic changes imposed on the firm via legislation are also a manageable risk, given the firm’s monetizable user base, which is overwhelmingly adult, thereby insulating the firm against such legislation,” a Morningstar analyst note said.

While no one can predict which way the coalition case will go, Meta’s problems extend to concerns about significant financial exposure in some of its investments and business units.

For instance, Reality Labs, the division responsible for Meta’s virtual and augmented reality tools and software like the metaverse, has lost $70bn since 2020.

Meta has also ramped up spending to build out AI infrastructure as growing concerns about an AI bubble loom over the sector.

Cash flow for the business fell significantly, from $12bn in the first quarter to $784m in the second quarter, although it did not go into negative territory as some analysts had expected.

“I think it’s [Meta] in an unenviable spot, because it’s facing pressure from multiple fronts,” Aleksandar Tomic, associate dean for strategy, innovation, and technology at Boston College, told Al Jazeera.

“These verdicts are going to put pressure on their advertising business. The AI development seems to have stalled, and the virtual reality thing seems to be dead on arrival, at least for now. So the only bright spot is that they might be able to get into the AI infrastructure game, but that is no guarantee.”

Meta itself is worried about the financial strain. “There can be no assurances that a favorable final outcome will be obtained in all our cases, and defending any lawsuit is costly and can impose a significant burden on management and employees,” the company said in a January Securities and Exchange Commission (SEC) filing.

Can the lawsuit impact its core product?

While financial penalties might be a strain, a legal requirement to fundamentally alter the machinery that makes Instagram and Facebook so valuable to advertisers would be much harder for Meta to absorb.

The lawsuit calls for changes to its business model, including eliminating the infinite scroll that allows users to continually look at new posts. Meta’s advertising business is dependent on impressions, or the number of times a content appears on a user’s screen. The longer someone is on the app, the more impressions they can see.

“Our financial performance has been and will continue to be significantly determined by our success in adding, retaining, and engaging active users of our products that deliver ad impressions, particularly for Facebook and Instagram,” the company said in an SEC filing.

“User growth and engagement are also impacted by a number of other factors, including competitive products and services, such as TikTok, that have reduced some users’ engagement with our products and services,” the filing added.

In 2025, Meta reported 12 percent more advertisement impressions than in 2024, while the average price per advertisement jumped by 9 percent.

The plaintiff states want the company to make other changes, including getting rid of algorithms and AI models made from data compiled from minors. The states are also asking the court to compel the company to promote the wellbeing of its users and set time restrictions for its youngest consumers.

Meta has introduced features that have reminded teens of their time use on their platforms. In January 2023, it gave teens ways to manage the kinds of advertisements they could see on Instagram and Facebook. In June 2023, it introduced a feature to notify teen users that they have spent more than 20 minutes on the platform and to set daily time limits.

“We stand by our record of creating strong protections for teens, and look forward to making our case in court,” Stephanie Otway, a Meta spokesperson, told Al Jazeera.

But the lawsuit says that is not enough, alleging that teens could easily dismiss the notification and continue scrolling.

How will this impact future lawsuits?

Meta is currently facing lawsuits from more than 100,000 different parties, according to its SEC filings, including individuals, cities, states, and school districts around the US.

“These first few cases going out are really going to set the standard,” Tre Lovell, a Los Angeles-based media law and entertainment lawyer, told Al Jazeera.

Lovell predicted that, ultimately, there will be a combined settlement.

“We’re going to get close to some type of global settlement, a global resolution. I think, ultimately, that’s where this is going to end.”

Snap, TikTok, and Google’s YouTube have also faced litigation amid allegations that their products are built to encourage compulsive use by young people, Tomic told Al Jazeera. The claims could open the floodgates to the type of litigation that challenged the tobacco industry in the late 1990s, he said.

“This is the tobacco litigation of the information age. They [the plaintiffs in the Meta lawsuit] have identified this addiction component of social networks. Now that there is a judgement against Meta, I would be shocked if we don’t see everybody else getting sued, and once they get sued, it will be pretty much the same,” Tomic said.

In 1998, 46 states settled lawsuits with major cigarette makers over health costs and forced the companies to impose restrictions on advertising, especially targeting younger audiences.