Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) has agreed to pay up to $16.68 billion to settle claims from 29 US states that Instagram and Facebook harmed children, misled users about safety and improperly collected data from users under 13, according to court filings.
The settlement ends a federal trial in California and includes $2.2 billion payable to California alone, the filing showed. It avoids penalties the states had sought that could have reached roughly $200 billion, while Meta had estimated its worst-case exposure at up to $1.4 trillion.
As part of the deal, Meta committed to spending $18 billion over 10 years on youth online safety initiatives. For users under 18, the company agreed to a default two-hour daily limit on Instagram and Facebook use and a nighttime block from midnight to 6 am., with parental approval required to lift either restriction.
Other measures include an option for a non-personalized feed, the ability to hide like and reaction counts, stronger age verification and removal of users under 13, additional parental controls, and a commitment to respond to 90% of reports of potentially harmful content within six hours.
Meta will maintain and improve its teen safety measures for 10 years, with an independent auditor monitoring compliance for five years.
Of the total settlement, about $12.7 billion will go to the states directly, while another $5.3 billion is contingent on YouTube and TikTok agreeing to implement similar daily limits, night mode and age assurance measures. If those platforms join the agreement, Meta's default teen time limit would drop from two hours to one hour per day.
The deal marks one of the largest coordinated multistate actions against a technology company over child safety, and imposes structural product changes alongside financial penalties. The $5.3 billion tied to TikTok and YouTube adoption is a notable mechanism, designed to prevent Meta from bearing safety costs unilaterally while competitors do not.
Meta will record a roughly $10 billion legal expense in the third quarter of 2026 tied to the settlement but said its July financial guidance remains unchanged.
Shares of Meta rose 2.1% on Wednesday.
