Mark Zuckerberg’s Meta has agreed to pay up to $16.68 billion as part of a historic settlement with 29 state attorneys general who alleged the company purposely built Instagram and Facebook to addict kids.
The agreement includes a commitment from Meta to make design changes to the apps, including imposing daily usage limits, “nighttime blocks” on app usage before bed and “enhanced age assurance measures” to ensure underage kids can’t use Facebook or Instagram, according to a court filing Wednesday.
Meta also agreed to create “additional tools to help parents and guardians to protect their children online” as part of what was described as a “consent judgement.” The settlement is pending court approval.
Meta shares popped 4% in premarket trading on news of the settlement, which was announced just days into a landmark trial in California federal court. Zuckerberg had been set to testify at some point in the proceedings.
With the settlement, Meta averted a trial that was widely seen as an unprecedented threat to its business model. The case is one of thousands that the social media giant currently faces in California state and federal court alleging it is responsible for fueling a teen mental health crisis.
Jurors in the federal case heard testimony earlier this week from former Meta safety researcher Arturo Béjar, who declared in scorching testimony that “you just cannot trust Mark Zuckerberg with kids.”
Béjar also personally accused Zuckerberg of misleading the public about Meta’s efforts to protect kids online.
“I felt that he created a false and misleading impression of Facebook’s commitment to young people,” said Béjar, who estimated that he spoke to Zuckerberg about safety issues at least 100 times during his tenure.
The coalition of state attorneys general accused Meta – which earns the bulk of its revenue from digital advertising – of violating federal law by harvesting kids’ data without parental consent.
The state AGs also claimed that key features of Facebook and Instagram, including the “like button” and recommendation algorithms, are intentionally addictive and have contributed to a rise in anxiety, depression, self-harm and even suicide among teen users.
The four lead states in the case – California, Colorado, Kentucky and New Jersey – further alleged that Meta misled the public about the extent of the safety risks associated with kids using its apps.
Ahead of the trial, Meta claimed that the states were seeking $1.4 trillion in damages – nearly equal to the company’s entire market cap. The tech giant’s lawyers described the potential penalty as “outlandish” and far beyond the scope of their actual claims.
Lawyers for the states said $200 billion was a more realistic amount if they were to win the case at trial and said Meta was pushing the larger figure for “shock value.”