Meta Platforms has agreed to settle a major child safety lawsuit with 52 attorneys general for up to $18 billion, resolving one of the most closely watched legal threats against the company. The deal closes claims that Meta designed Facebook and Instagram to be addictive to minors, misled consumers about platform safety, and improperly collected personal data from young users without parental consent.
The settlement was reached during a federal trial in California involving claims brought by 29 states. Court filings on Wednesday outlined a proposed consent judgment requiring Meta to implement sweeping changes. California Attorney General Rob Bonta said California is expected to receive between $1.5 billion and $2.1 billion if the court gives final approval. Bonta called the agreement a step that would “make social media less dangerous for our kids.”
Under the settlement, Meta will pay roughly $18 billion in annual installments over 10 years. About 70% of the total, approximately $12.7 billion, will be paid directly to participating states. The remaining 30%, around $5.3 billion, is conditional and will only be released if YouTube and TikTok adopt equivalent safety measures, including one-hour daily usage limits, night modes, and age verification tools. Meta’s chief legal officer CJ Mahoney said the framework “will only work if all our peers join us.”
The operational requirements are among the strictest ever imposed on a major tech platform. Users under 18 will face a default two-hour daily screen time limit, adjustable only by a parent. That limit drops to one hour if competitors adopt the same standard. Apps must enforce a default lock between midnight and 6:00 a.m. for minor accounts. Notifications will be muted between 10:00 p.m. and 7:00 a.m. and during school hours. Teens can opt into a non-personalized, non-algorithmic feed. Meta must also remove cosmetic procedure image filters for teen accounts and hide public like and reaction counts. An independent auditor will monitor compliance and report directly to state enforcement officials.
From an accounting standpoint, Meta expects to record a legal charge of approximately $10 billion in the third quarter of 2026. The company said all other financial guidance from its July earnings release remains unchanged. Meta incurred $2.4 billion in legal fees in its latest quarter and is projecting up to $145 billion in capital expenditure for 2026 tied to AI infrastructure.
META stock initially jumped more than 4% in premarket trading before giving up most of those gains. The stock was up about 0.8% as the market opened, reflecting a muted investor reaction as settlement details emerged. The agreement also came a day after Instagram chief Adam Mosseri testified in the trial. DC Attorney General Brian Schwalb called the settlement a “monumental public health victory,” saying the safety features would fundamentally and immediately change how young people use Instagram and Facebook.
