Meta Settles With US States For $16.7 Billion Over Social Media Harms To Children

Meta Platforms has reached a $16.7 billion settlement to resolve a landmark claim brought by several states that the company designed Instagram and Facebook to addict children, improperly collected children’s personal data, and misled consumers about their safety. 

The deal was in a Wednesday court filing in California after a lawsuit was brought by 29 states - with attorneys for  Colorado, California, New Jersey and Kentucky – leading the group. The states argued that features like infinite scroll were purposely engineered to keep young users hooked, that Meta misled the public about the safety of its platforms for adolescents, and that the company improperly collected and monetized children’s personal data in violation of federal law.

As part of the settlement, Meta must implement daily usage limits and ‘nighttime blocks’ for teenagers who use the company’s apps like Facebook and Instagram, as well as “enhanced age assurance measures” that would prevent children from using them, and also providing parents with additional tools, CNBC reports.

Additionally, Meta is tying another $5.3 billion of the settlement to Google and TikTok adopting similar teen safety measures - cutting default teen time limits from 2 hours to 1 hour per day. 

The attorneys general of Alabama, Alaska, American Samoa, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming joined the settlement.

Prior to the settlement, Meta warned that maximum statutory penalties could theoretically reach $1.4 trillion, while the attorneys general have indicated they may seek around $200 billion. That said, the company still faces thousands of lawsuits filed by school districts and individual plaintiffs alleging harms from social media. 

While shares spiked as much as 5% premarket on the news, the move was quickly reversed at market open.

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