Meta has agreed to pay up to $16.68 billion as a settlement to resolve lawsuits by 29 US states, alleging that the company designed Facebook and Instagram to be addictive for children.
It agreed to pay the sums and make major changes to Facebook and Instagram to resolve claims that it misled consumers about their safety and improperly collected personal data from children who used its platforms.
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Reuters reports the changes will include daily usage limits and restrictions on nighttime use of Facebook and Instagram for children.
It will also prevent children from accessing age-restricted content.
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This settlement resolves privacy lawsuits from California, Illinois, New Mexico, and Washington, DC, related to the Cambridge Analytica scandal, in which a consulting firm collected the personal data of millions of Facebook users.
The states claimed Meta violated the federal Children’s Online Privacy Protection Act by collecting their personal data without parental notification or consent.
They also claimed the company used the data to train machine learning and generative AI models.
These states will receive $459.3 million to settle the cases.
The claims were part of a larger wave of lawsuits by states, local governments, school districts, and individuals accusing Meta and other social media companies of contributing to the surge in the youth mental health crisis.
Before the trial, Meta said four states—California, Colorado, Kentucky, and New Jersey—wanted up to $1.4 trillion in penalties.
The states had earlier said the amount would be closer to $200 billion.
They also sought more damages, major changes to Meta’s platforms, and a ban on children creating accounts.
However, the California-based company denied wrongdoing in agreeing to settle.
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Meta argued that it could not have misled consumers by saying its services were not addictive because “social media addiction” is not officially recognised as a mental health disorder.
“Ensuring teens have a safe and productive experience on our platforms is an absolute imperative for Meta,” the company said in a statement on Wednesday.
“We want to get this right for parents and teens, and that’s why we partnered with state attorneys general to set a new industry standard,” it added.
Aside from Meta, Snapchat, YouTube, TikTok, along with their parent companies, face thousands of lawsuits over allegations that they knowingly designed their platforms to be addictive.
The platforms are being accused of contributing to a mental health crisis.
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