Meta Agrees to $17.1bn Settlement over Social Media Addiction Claims

Meta, the parent company of Facebook and Instagram, has agreed to pay up to $17.1 billion to settle a landmark lawsuit filed by U.S. states over allegations that its platforms were designed to encourage social media addiction among young users.

The settlement, announced on Wednesday, August 26, 2026, also requires Meta to introduce new measures aimed at improving child safety across its platforms.

The agreement brings an early end to a trial in Oakland, California, involving allegations from dozens of states that Meta deliberately designed Facebook and Instagram to keep young users engaged while downplaying the potential risks to their wellbeing.

According to state attorneys general, Meta will pay at least $12.1 billion over 10 years to the states involved in the multistate lawsuit.

The company could pay an additional $5 billion if other major social media platforms, including YouTube and TikTok, reach similar settlements.

Meta said it had also reached a separate settlement with Texas, which was not part of the multistate agreement. That deal brings the company’s potential total payout to about $18 billion.

The settlement remains subject to court approval.

The amount represents a relatively small portion of Meta’s financial performance, with the company reporting $201 billion in revenue in 2025.

New restrictions for teenage users

As part of the agreement, Meta will introduce several measures targeting how young people use its platforms.

The company is expected to impose a two-hour daily limit on teenage users and restrict minors from accessing Facebook and Instagram during overnight hours.

Meta will further strengthen its systems for verifying whether users are under 18 and introduce more accessible parental controls.

The company will also place restrictions on social-comparison features, including visible “like” counts, and ban certain features such as plastic-surgery filters for minors.

California Attorney General Rob Bonta said the agreement would force Meta to make significant changes to the way it designs and operates its platforms.

States accused Meta of targeting children

The lawsuit was initially filed in 2023 by 29 states, including California, Colorado, Kentucky and New Jersey.

The states accused Meta of deliberately designing its platforms to attract, engage and retain young users while failing to adequately disclose the potential risks associated with excessive social media use.

They also alleged that Meta violated the Children’s Online Privacy Protection Act (COPPA) by collecting and using personal information belonging to users under the age of 13.

The settlement follows testimony from former Meta engineering director Arturo Béjar during the trial. He alleged that the company designed its products to maximise user engagement even when doing so could negatively affect users’ mental health.

Meta described the settlement as an important step toward improving online safety for young people.

The company also urged other major social media companies to adopt similar protections.

Meta said safeguards would be more effective if platforms such as TikTok and YouTube implemented comparable measures.

The company has previously introduced Instagram Teen Accounts, which provide younger users with stronger privacy, messaging and content protections.

However, child-safety advocates and some former Meta employees have argued that existing measures have not gone far enough.

New York Attorney General Letitia James said the financial settlement would provide additional resources for mental health services for young people and public education about the potential risks associated with social media.

The agreement represents one of the largest financial settlements involving a major social media company and could increase pressure on other technology platforms facing similar allegations over their treatment of young users.