Meta to Pay Up to $17.1 Billion in Landmark Settlement Over Social Media Addiction Claims
New York Times · LC · trust 66/100
The social media giant settled with 47 states, the District of Columbia and U.S. territories, and agreed to make major changes to its products over claims its platforms endangered children.
Listen · 8:55 min Share full article 858 Meta headquarters in California. Credit... Jason Henry for The New York Times By Cecilia Kang and Eli Tan
Meta on Wednesday reached a landmark settlement with 47 states, the District of Columbia and U.S. territories, agreeing to pay up to $17.1 billion in penalties and make major changes to its products over claims it endangered children with addictive social media platforms. In a dramatic capitulation, the owner of Facebook and Instagram agreed to the financial penalties for violating federal child privacy and states’ consumer protection laws, the states announced. Meta also agreed to limit how long teenagers can spend on its platforms and to bans on features that stoke mental health issues, striking at the heart of the company’s business of engagement for advertising.
“The focus of this case was to protect our kids: stopping notifications and alerts at night and when they are in school, encouraging them to take breaks from social media, protecting them against harmful features,” said Colorado’s attorney general, Phil Weiser, in a statement. The agreement exceeded what most courts might order, he added.
The settlement effectively ends a bellwether federal trial in the U.S. Northern District of California in Oakland, where California, Colorado, Kentucky and New Jersey were seeking roughly $200 billion over accusations that Meta harmed children. The states filed their agreement with Meta on Wednesday morning in that court, where Judge Yvonne Gonzalez Rogers is expected to approve it.
Separately, Meta said on Wednesday that it settled with Texas for about $1 billion over similar allegations. The company still faces numerous other lawsuits from school districts and individuals, some of which are scheduled for trial in the coming months.
The company’s stock price rose 1.3 percent on the news. The company is valued at $1.47 trillion and most recently generated $60.8 billion in quarterly revenue.
The settlement could signal an inflection point for a social media industry that has largely escaped regulatory scrutiny over the harms its products have caused children. The settlement amount is one of the highest ever paid by a tech company to states.
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