Meta agreed to pay up to $17 billion and make changes to its Facebook and Instagram platforms as part of a landmark settlement to resolve a child safety lawsuit that involved California and other states.
The proposed settlement, which still needs approval and would be the largest legal action against the tech titan, cuts short a high-profile trial that started a little more than a week ago in a federal court in California.
It’s the latest example of how the world’s largest social media giant is grappling with legal challenges that seek to hold the company accountable for allegedly harming children.
California was among dozens of states that sued Meta in 2023, alleging in a lawsuit that the social media giant intentionally designed harmful and addictive features to hook children while misleading the public about the dangers. Some of the harms included depression, anxiety, addiction and body image issues as young people compare themselves to others on social media.
The states accused Meta of violating state consumer protection laws and a federal law that protects the online privacy of children under13.
“This is momentous. This is a major step forward in the ongoing quest and journey to make sure that our children are safe everywhere, including online,” said California Atty. General Rob Bonta in a press conference on Wednesday morning.
As part of the proposed settlement to settle claims filed by 47 states, California would receive between $1.5 billion to $2.1 billion. The California governor and legislature would decide how most of that money will be spent, Bonta said, but it will be used to address child safety on social media.
While Bonta called the settlement amount “historically high,” he said the major focus is on the changes that Meta agreed to make to its platforms so they’re safer for children.
Among several solutions such as time limits and muting notifications during certain hours, the changes include giving teens the option to choose to view a non-algorithmic social media feed that isn’t personalized. Social media platforms show people videos and other content they might be interested in viewing, keeping them scrolling online for hours.
Meta said it would also give teens the ability to not play content automatically, hide likes and reactions and block teens from using extreme makeup filters, which can potentially harm a person’s self-esteem.
The settlement also includes solutions that would only kick in if Meta’s rivals such as YouTube and TikTok also implemented similar measures.
“Because teens move fluidly across dozens of apps, we need an industry-wide solution. We therefore call on our industry peers, TikTok, Snap, and YouTube, to implement this new framework, right away,” Meta’s Chief Legal Officer C.J. Mahoney, said in a statement.
TikTok, YouTube and Snap didn’t immediately respond to a request for comment.
Although the $17 billion is the biggest penalty yet against the platform, experts and child safety advocates say the agreed-upon changes are far more significant for both users and the company’s bottom line.
“They may be even more stressed out about that,” said Peter Jackson, a privacy and cybersecurity attorney in Los Angeles, in an interview prior to the settlement announcement. “You could see other jurisdictions outside the U.S. pushing for similar restrictions.”
Forrester’s Principal Analyst Kate Winick said that while the potential penalty is large, the changes that Meta agreed to make “fall within the bounds of product changes Meta has already been required to make in other markets.”
Indeed, some investors seemed relieved by the settlement. Meta shares rose around 1% to end the day at $576.14.
The settlement also comes as federal and state lawmakers are trying to pass new legislation to make online platforms and AI safer for kids.
Continuing with the trial carried some risk for Meta because the company lost several child-safety cases this year, including one in Los Angeles.
In August, shortly before the trial kicked off in California, a New Mexico court ordered Meta to pay $942 million and take steps to make the platform safer, including preventing minors from engaging in romantic or sexualized interactions with its AI chatbots.
Meta’s settlement follows a day of testimony from current and former Meta employees about the design and deployment of its existing safety features.
“One of the reasons the features were developed were to protect us in future lawsuits,” said former Meta data scientist George Volichenko.
Across hours of tense questioning, he and other witnesses revealed that they were told to keep such features “opt in” despite only a tiny fraction of users adopting them — a move meant in part to keep eyeballs on the app.
“We received guidance not to proceed with the feature as opt out,” Volichenko said of Meta’s widely touted “take a break” tool. “I would expect [use] to be much larger, orders of magnitude. [But] we were not allowed to do that.”
Attorneys also routinely edited internal documents to remove sensitive information before it could be seen by Meta Chief Executive and co-founder Mark Zuckerberg and other top brass, in part so they could not be asked to testify about it later, witnesses said.
“I’m not sure what the reasons might be for removing information from presentations before they might get to me, but I’m not encouraging my team to try to hide anything,” Instagram boss Adam Mosseri testified Tuesday.
As part of the agreement, those features will now default on.
Ahead of the trial, Meta said in a court filing that financial penalties in the case could amount to as much as $1.4 trillion. The settlement is a fraction of the hundreds of billions of dollars Meta makes every year. In 2025, Meta’s revenue totaled roughly $200 billion and its net profit was roughly $60 billion.
Bonta said during the press conference that he doesn’t think the states compromised on anything in the settlement.
“There’s always more to do. This is a really strong down payment, if you will, on protecting our kids. It is transformative. It is a watershed moment. It is a milestone mark,” he said.
The Associated Press contributed to this report.
