$17bn Settlement: Meta Bows to Teen Screen-Time Rules in Landmark Addiction Case
Meta Platforms on Wednesday settled the landmark youth social media addiction trial by agreeing to a settlement proposal amounting up to $17 billion, as it urged other big social media firms to adopt teen screen time rules.
Meanwhile, stock analysts said Meta shares were quiet at Wednesday morning trade after the company accepted the $17 billion multistate proposal to resolve allegations that Facebook and Instagram were designed to encourage compulsive use among children and teens, as well as misleading users and the public about the platforms’ safety.
The settlement, announced by California Attorney General, Rob Bonta, and a bipartisan coalition of attorneys general, is substantially lower than the $1.4 trillion in damages Meta said the four states could seek in a July court filing.
The Mark Zuckerberg-led firm stated that the payment would be distributed in annual installments over a 10-year period.
The settlement also includes changes to how people under 18 can access and use Meta’s platforms, with some restrictions becoming stricter if other social media platforms, like YouTube and TikTok, adopt similar measures.
Meta stated that participating states would receive approximately 70 percent of the allocated payment over the decade, and the remaining 30 percent would be released only after YouTube and Tiktok implement the same age assurance measures and pay amount match the 30 percent figure, which comes to around $5.3 billion.
Meanwhile, Meta stock edged 0.5 percent higher in morning trade and was among the top trending tickers on Stocktwits at early Wednesday. Retail sentiment around the enterprise improved to ‘neutral’ from ‘bearish’ territory over the past day.
The settlement comes just days after trial began in federal court in Oakland. The agreement still requires court approval before it takes effect.
Under the proposed agreement, users under 18 would receive a default daily limit of two hours on Meta’s platforms. That limit could only be lifted by a parent. If other social media companies agree to similar restrictions, the default limit would fall to one hour.
Meta also has to introduce a default overnight block from midnight to 6 a.m. for users under 18, with parents able to override the restriction. That window could expand to 10 p.m. to 7 a.m. if other platforms adopt similar terms.
The settlement would also block notifications during overnight hours and the school day, limit the display of likes and reactions to minors, and prohibit cosmetic procedure filters for users under 18.
Teen users would also have the option of a non-personalized feed that does not use an algorithm designed to keep them scrolling.
The agreement would require Meta to strengthen its systems to identify users under 18 and remove children under 13 from its platforms.
The company is also required to expand parental supervision tools and create a faster process for teens to report potentially harmful content. Meta would be required to respond to 90 percent of those reports within six hours.
An independent auditor will be assigned to oversee Meta’s compliance, with access to company information and the ability to report concerns directly to the attorneys general.
The settlement follows two recent losses for Meta in a separate case brought by New Mexico. In March, a jury ordered Meta to pay $375 million after finding it had misled consumers about platform safety. Earlier this month, a judge found Meta had created a public nuisance and ordered an additional $567 million in penalties along with youth-safety measures. Meta has said it will appeal both rulings.
