Meta to pay up to $18 billion — Instagram and Facebook limit teens

Meta has agreed to pay US states up to about $18 billion to end the lawsuit accusing it of designing Facebook and Instagram to hook children — and, more consequentially for the products themselves, to write limits on teenage use into the apps. Accounts belonging to under-18s get a default two-hour daily cap that only a parent can raise, and the apps go dark between midnight and 6 a.m.

The deal landed in the middle of a trial. A jury trial opened on August 18 in federal court in Oakland, California, before Judge Yvonne Gonzalez Rogers, in a case brought by 29 states; four of them — California, Colorado, Kentucky and New Jersey — were presenting claims to the jury. The states alleged that Meta knowingly built its platforms to be addictive to minors, collected children's data without parental consent in breach of federal law, and misled the public about how safe its apps were. Mark Zuckerberg had been expected to testify.

The headline number is doing more work than it looks. Meta says the agreement "includes a payment of approximately $18 billion," spread over ten years in annual installments; several news organisations put the figure at $16.68 billion, and California's attorney general described it as $17 billion. The gap is structural rather than a reporting error. Roughly 70 percent — about $12.7 billion — goes to the participating states no matter what. The remaining 30 percent, about $5.3 billion, is payable only if TikTok and YouTube adopt comparable youth protections and make matching financial contributions of their own. Meta has booked $10 billion of the cost as a legal expense in the third quarter.

That condition is the part worth watching. Meta is not only buying peace; it is paying a premium to turn its own new restrictions into the industry's floor. "These protections will only be truly effective if we work with our peers — TikTok and YouTube," the company said. A private settlement between one firm and a group of state prosecutors is being used to do the work of a statute that Congress has not passed — and it gives Meta a commercial reason to want its competitors held to the same terms.

The product changes are extensive. Like and reaction counts disappear from minors' posts. Notifications are muted during school hours, 8 a.m. to 3 p.m. Prompts appear every 15 minutes of continuous use and again at 60 and 90 cumulative minutes a day. Teenagers get an optional feed that is not algorithmically ranked, and can switch autoplay off. "Extreme makeup filters" are blocked. Meta must strengthen age checks, remove accounts belonging to under-13s, submit to an independent auditor and answer 90 percent of harmful-content reports within six hours. Direct messages are excluded from the time limits.

The caveats matter. Meta denies wrongdoing, and a judge still has to approve the agreement. The commitments are time-limited rather than permanent — the initial term is reported as five years, extending toward ten if rivals follow. And the settlement closes only the states' case: thousands of personal-injury claims and separate lawsuits from school districts are untouched.