Meta Platforms to pay up to USD18 billion to settle social media case

(AWP Alliance News) - Meta Platforms Inc on Wednesday said it has agreed to pay US states as much as USD18 billion and to impose sweeping new limits on how teenagers use its social media platforms.

The Menlo Park, California-based firm which owns Facebook and Instagram said the agreement includes a payment of USD18 billion, which can be used to fund youth online safety initiatives, among other state priorities.

The payment will be distributed in annual instalments over a 10-year period.

Participating states will receive around 70%, USD12.7 billion, of the allocated payment over the decade. The remaining 30%, USD5.3 billion, will be released only after two specific conditions are met.

These are that YouTube and TikTok implement a one-hour daily limit, night mode, and age assurance measures and that YouTube and TikTok each pay an amount matching the 30% figure, with half of the remaining funds tied to YouTube's payment and half tied to TikTok's.

YouTube is owned by Google-parent Alphabet Inc, while TikTok is owned by China's ByteDance.

Meta expects to accrue a legal expense of USD10 billion in the third quarter of 2026 related to the agreement, not included in the expense range that was provided in the second quarter earnings call.

Otherwise, guidance ranges provided in the July earnings release remain unchanged.

"Our agreement includes strict daily time limits teens can't turn off, default blocks from our apps at night, muted notifications during school hours, and new controls for parents," Meta said in a statement.

"We want to ensure teens benefit from this new industry standard, but we cannot do it alone. These protections will only be truly effective if we work with our peers - TikTok and YouTube - to put the same measures in place," it added.

The proposed settlement, filed in federal court, would resolve claims by a coalition of US states that Meta deliberately engineered its platforms to hook young users, misled the public about the risks and unlawfully collected data from children under 13.

Instagram boss Adam Mosseri took the stand on Tuesday and admitted he touted newly launched safety tools for teens without disclosing low adoption rates from early testing several years ago.

Other witnesses testified over the past week that Meta knew the tools were not effective and even that they were "designed to fail."

Meta Founder and Chief Executive Mark Zuckerberg had been expected to testify as well.

Shares in Meta were down 0.8% at USD565.42 each in New York on Wednesday.

By Jeremy Cutler, Alliance News reporter

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