Meta settles US states' lawsuit over child addiction for $12 billion

Mark Zuckerberg, CEO of Meta | Source: BRENDAN SMIALOWSKI/AFP

Overview

29 US states had sued Meta, the parent company of Facebook and Instagram, alleging that the company deliberately made children and adolescents addicted to its platforms. Now, Meta has agreed to a multibillion-dollar settlement with significant operational concessions—a move that observers describe as a victory for liberalism.

The Lawsuit

The attorneys general of 29 states accused Meta of using algorithms to intentionally addict minors, causing harm to their well-being. The original lawsuit sought $193 billion in damages. A guilty verdict could have led to far-reaching consequences, including usage bans for children and adolescents—measures already enacted or under consideration in Australia, Canada, and Great Britain.

The Settlement

Meta CEO Mark Zuckerberg is likely to view the settlement as a favorable outcome. Key terms include:

• Payment: $12 billion, paid over ten years (roughly 1% of Meta's annual revenue)
• Additional payment: $5 billion if Snap, TikTok, and YouTube agree to similar restrictions
• Age verification: Meta will develop new methods to determine the age of all users
• Usage limits for under-18s:
• Maximum daily usage: two hours (one hour if competitors join)
• Blackout period: midnight to 6:00 AM
• No messaging during school hours
• Engagement metrics: User engagement with posts, including "likes," will not be displayed
• Algorithm-free feed: Instagram will offer an option for an algorithm-free feed

Historical Parallels

The case echoes the 1998 lawsuit by 46 US states against the four largest tobacco companies. That settlement required the companies to pay at least $206 billion to state health authorities and refrain from advertising targeting young people. Despite dire predictions from the industry, the regulations did not bankrupt the companies and paved the way for stronger protections in Europe.

Broader Implications

Thousands of additional lawsuits by individuals and school authorities are pending against Meta and its competitors. These could lead to further restrictions on powerful media operators. The settlement is seen as a victory for liberalism—understood in the American sense as a check on unchecked corporate power—and a precedent for holding tech companies accountable for the societal harms of their platforms.

"Meta and Co. can, will, and should also make money without making children addicted and without becoming instruments of destabilizing free societies through hate, mockery, and fake news."