KUALA LUMPUR – Meta Platforms has agreed to pay up to US$16.68 billion (RM67.22 billion) and introduce major changes to Facebook and Instagram to settle claims by US states that the platforms were designed to encourage addictive use among children, misled users about safety measures and improperly collected minors’ personal data.
The settlement resolves claims filed by 29 US states and brings an end to a federal trial that had become one of the most closely watched legal challenges against social media companies over alleged harm to young users, according to Reuters.
Under the agreement, Meta will introduce daily usage limits and restrict overnight access for children using Facebook and Instagram. The company will also strengthen measures to prevent minors from viewing age-restricted content.
The Menlo Park, California-based company denied any wrongdoing as part of the settlement.
The agreement also settles lawsuits brought by California, Illinois, New Mexico and Washington, D.C. over privacy issues linked to the Cambridge Analytica scandal, in which the consulting firm obtained personal information belonging to millions of Facebook users. The states will receive US$459.3 million (RM1.85 billion) to resolve those claims.
Meta shares rose 2.3% in early trading following the announcement.
The lawsuits form part of a wider legal campaign involving states, local governments, school districts and individuals, who have accused Meta and other social media companies of contributing to a youth mental health crisis by creating features that encourage excessive use.
The federal trial at an Oakland, California court examined claims from California, Colorado, Kentucky and New Jersey that Meta breached state consumer protection laws.
It also included allegations from 29 states that Meta violated the federal Children’s Online Privacy Protection Act by collecting personal information from children without parental notification or consent, and using such data to develop machine learning and generative artificial intelligence models.
Meta has consistently argued that it could not have misled consumers about whether its platforms were addictive because “social media addiction” is not a recognised psychiatric condition.
Before the trial began on Aug 18, Meta said California, Colorado, Kentucky and New Jersey were seeking penalties of up to US$1.4 trillion (RM5.64 trillion). The states, however, estimated the figure would be closer to US$200 billion (RM806 billion).
Meta, Snapchat owner Snap, YouTube parent Alphabet, and TikTok owner ByteDance continue to face thousands of lawsuits in federal and state courts over allegations that their platforms were deliberately designed with features that encourage addictive behaviour among children and teenagers.
A separate trial in Nashville involving claims brought by Tennessee against Meta began last month.
The federal cases were consolidated before US District Judge Yvonne Gonzalez Rogers in Oakland and include lawsuits filed by individuals, school districts and state governments.
Earlier this year, Meta lost both phases of a landmark lawsuit filed by New Mexico. In March, a jury ordered the company to pay US$375 million (RM1.51 billion) after finding it had misled users about the safety of its platforms.
On Aug 6, a judge ruled that Meta had created a public nuisance and ordered the company to pay an additional US$567 million (RM2.28 billion), while requiring it to implement further youth safety measures.
In March, the first trial involving an individual’s claims against Meta and Google also ended with a verdict in favour of the plaintiff.
A Los Angeles jury found the companies liable for the depression and anxiety suffered by plaintiff Kaley G.M. and ordered them to pay a combined US$6 million (RM24.18 million) in damages.
The companies have said they will appeal those verdicts. – August 26, 2026