Meta Platforms has agreed to pay up to $16.68 billion to settle claims brought by U.S. states that Facebook and Instagram were designed to addict children, misled users about their safety and improperly collected children’s personal data.
The settlement, reached on Wednesday during a federal trial in Oakland, California, brings an early end to one of the most closely watched legal challenges to a major social media company over its impact on young users. Meta denied wrongdoing as part of the agreement.
The case involved claims from 29 states and was part of a broader wave of litigation accusing social media companies of contributing to a youth mental health crisis.
READ: Apple, Meta, and 7 tech giants face lawsuit over AI voice training data (August 21, 2026)
The settlement is far below the potentially massive penalties that the states had threatened to seek. Before the trial, Meta said the four states leading the consumer protection claims could seek as much as $1.4 trillion in penalties under their interpretation of state laws.
The states argued that every month in a teenager spent more than 30 minutes a day on Facebook or Instagram could constitute a violation. Their calculations produced more than 265 million alleged violations, with New Jersey’s maximum statutory penalty alone potentially reaching hundreds of billions of dollars.
The judge had previously described the states’ potential penalty figure as extreme. The settlement means Meta will not face a jury decision on those claims and CEO Mark Zuckerberg will not testify in the trial.
Under the agreement, Meta will also introduce nationwide changes aimed at limiting teenagers’ use of Facebook and Instagram and strengthening protections for young users. The measures include daily usage limits, nighttime restrictions and tighter controls on content and notifications.
The company has consistently rejected allegations that it deliberately designed its platforms to harm children. Meta has argued that it has invested heavily in youth safety and that social media can provide benefits to young users.
The settlement does not end Meta’s broader legal exposure over youth safety. The company continues to face lawsuits from individuals, parents, school districts and governments, while other technology companies including Snap, YouTube and TikTok are also confronting similar allegations.
READ: Meta launches Pocket, an AI app for creating games with text prompts (July 3, 2026)
The agreement follows recent legal setbacks for Meta. A New Mexico judge this month ordered the company to pay $567 million and imposed youth-safety measures after finding that Meta had created a public nuisance. A separate jury in March ordered Meta to pay $375 million after finding that the company had misled consumers about the safety of its platforms.
The latest settlement is subject to court approval and could become one of the largest state consumer protection settlements involving a technology company. For Meta, the agreement avoids the prospect of a lengthy trial and potentially enormous penalties while forcing changes to how its platforms are used by millions of teenagers.