Meta agrees to sweeping changes, $18 billion payout in landmark state settlement
Social media giant Meta agreed to pay as much as $18 billion and institute sweeping changes to how children can use its apps in a landmark nationwide settlement that aims to broadly shift how young people use social media across a range of companies and apps.
The settlement comes more than a week into a major trial in Oakland, California, where a jury and a judge were in the midst of hearing arguments from four state plaintiffs that alleged Meta’s Facebook and Instagram apps purposefully addicted children and teens, leading to anxiety and depression across a generation of youths.
“This is major breakthrough, a milestone moment, a watershed moment,” California Attorney General Rob Bonta (D) told reporters Wednesday. “Instead of getting tied up in years of trials and appeals, we have secured the changes we were after.”
The payout would be among the largest of its kind since the 1990s Big Tobacco cases. It includes unusual terms designed to convince other tech firms to agree to sharp limits on teens’ use of their platforms—opening the door for the first time to a broad set of national rules governing children’s use of social media.
The Oakland trial was part of a wave of litigation from state governments, school districts and teens centered on Meta and other social media companies, including Google’s YouTube, TikTok and Snap. The other companies have already reached some settlements. Wednesday’s far larger settlement, which must still be approved by a judge, came after jury verdicts earlier this year revealed the first cracks in the industry’s legal defenses.
“2026 will go down as the year in which social media platforms faced a reckoning in how they deliver content to minors,” said Clay Calvert, a fellow at the American Enterprise Institute, a Washington think tank.
The settlement covers every state and the District of Columbia, except for New Mexico—which won a similar case in state court—and Florida, where the attorney general rejected the deal.
Parents, child advocacy organizations and politicians from both sides of the political spectrum have for years accused Meta and the other social media companies of contributing to phone addiction, cyberbullying and a host of mental health issues. The companies have generally pushed back, saying that they provide parental control features and that ultimately it is up to parents themselves to police their children’s phone use.
The agreement announced Wednesday forces Meta to institute much stricter limits on how children can use its apps. Facebook and Instagram will be blocked from midnight to 6 a.m. Notifications will be turned off by default during school hours, and teens will only be able to use the apps for two hours a day, unless a verified parent turns off the control. “Like” counts on teen posts will be turned off by default.
Meta agreed to use “age assurance” technology to determine which of its users should be subject to the restrictions—or are under 13 and are too young to be on its platforms at all.
The four states, Colorado, New Jersey, California and Kentucky, began the trial by demanding payments as high as $1.4 trillion—about the same as Meta’s entire market value. The $18 billion settlement figure is one of the largest in U.S. history, similar to the more than $20 billion paid by the oil giant BP following the Deepwater Horizon disaster in 2010.
The settlement includes an initial $12.7 billion payment from Meta to fund youth online safety initiatives, including an independent organization that will have access to company data to study trends in app use, something child advocates have long asked for.
“This is a historic settlement that will have a lasting impact, but we cannot truly protect all children and teens until these protections are required on every platform and are permanent,” said Sacha Haworth, executive director of the Tech Oversight Project, which advocates for stricter guardrails for kids online.
The settlement is designed in a way that it becomes stricter if Meta competitors YouTube and TikTok agree to its terms: The overnight blackout would extend from 10 p.m. to 7 a.m., and usage would be capped at an hour a day per app. Meta would pay an additional $5.3 billion if the other two companies adopt the same new policies and make payouts of the same size.
Meta for years has argued that even if it instituted stricter child controls, children would simply leave its app and go to others. The company issued an open letter to YouTube and TikTok calling on them to sign up for the rules.
“The framework we’ve negotiated will empower parents to easily manage how their children access our platforms,” C.J. Mahoney, Meta’s chief legal officer, said in a statement. “But its success depends on all other social media platforms following Meta’s lead.”
Spokespeople for YouTube and TikTok did not immediately return requests for comment.
Despite the massive settlement, Meta’s legal odyssey is not over. Meta and the other social media companies still face numerous lawsuits from individuals and school districts. The company said Wednesday it planned to continue fighting those cases, saying it views them as weaker than those brought by states.
Meanwhile, the attorney general of Florida, who did not sign on to the deal and has sued the company separately, said he would press on.
“The payouts are peanuts compared to the profound harms Meta’s profit-driven addictive features inflicted on kids, and a slap on the wrist for a trillion-dollar corp that’ll pay more to lawyers than to the states,” James Uthmeier (R), the Florida attorney general, said in a post on X.
Bonta said the previous verdicts against Meta this year and the ongoing federal trial in Oakland gave momentum to the settlement talks.
“From where I sit, you can’t ignore the major defeats that occurred in a short period of time,” Bonta told reporters.
Bonta, who also is suing TikTok, said his focus will now turn to the rest of the industry.
“Meta is a major player, and this is an incredible result, but there’s others that need to follow suit,” he said. “We’re happy to talk in the boardroom to get to those results, or we can see folks in the courtroom.”
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