Meta Agrees To Pay Up to USD 18 Billion in Landmark Settlement Over Child Safety on Facebook, Instagram

Social media giant Meta agreed to pay as much as USD 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. The payout would be among the largest of its kind since the 1990s Big Tobacco cases.

'Watershed Moment,' Says California Attorney General

California Attorney General Rob Bonta (D) told reporters Wednesday, "This is major breakthrough, a milestone moment, a watershed moment." He added, "Instead of getting tied up in years of trials and appeals, we have secured the changes we were after."

The settlement 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. Why Did Adam Mosseri Say Most Teens Didn’t Want Instagram’s ‘Take a Break’?

Part Of Wider Wave Of Litigation

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.

Clay Calvert, a fellow at the American Enterprise Institute, said, "2026 will go down as the year in which social media platforms faced a reckoning in how they deliver content to minors." Arturo Bejar in Meta Trial: Ex-Engineer Says 14-Year-Old Daughter Was ‘Prey’ on Instagram, Got S*x Requests.

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.

New Restrictions For Teen Users

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.

How The Settlement Figure Was Reached

The four states, Colorado, New Jersey, California and Kentucky, began the trial by demanding payments as high as USD 1.4 trillion, about the same as Meta's entire market value. The USD 18 billion settlement figure is one of the largest in U.S. history, similar to the more than USD 20 billion paid by the oil giant BP following the Deepwater Horizon disaster in 2010.

The settlement includes an initial USD 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.

Settlement Could Get Stricter If YouTube, TikTok Join

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 USD 5.3 billion if the other two companies adopt the same new policies and make payouts of the same size.

Meta issued an open letter to YouTube and TikTok calling on them to sign up for the rules. C.J. Mahoney, Meta's chief legal officer, said in a statement, "The framework we've negotiated will empower parents to easily manage how their children access our platforms." He added, "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.

Legal Battles Not Over For Meta

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.

Florida Attorney General James Uthmeier (R), who did not sign on to the deal, said in a post on X, "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."

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," he told reporters. Bonta, who is also suing TikTok, said, "Meta is a major player, and this is an incredible result, but there's others that need to follow suit. We're happy to talk in the boardroom to get to those results, or we can see folks in the courtroom."

(The above story first appeared on LatestLY on Aug 27, 2026 07:26 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).