Technology giant Meta Platforms (META) has agreed to pay $17.1 billion U.S. to settle legal claims that the company’s social media platforms intentionally addicted teenagers and children.
Meta reached a settlement with 47 U.S. states, the District of Columbia, and U.S. territories, agreeing to pay $17.1 billion U.S. in penalties and make major changes to its products.
Analysts and legal experts called the settlement a landmark and a dramatic capitulation for the company that owns Facebook and Instagram.
The settlement money, which will be paid in installments over 10 years, is one of the highest ever reached by a technology company and U.S. states.
In the settlement, Meta Platforms acknowledged that it had violated federal child privacy and state consumer protection laws.
Meta has agreed to limit how long teenagers can spend on its platforms to two consecutive hours and also agreed to bans on features that could cause youth mental health issues.
The settlement ends multiple trials at the state and federal levels that had been hanging over Meta and weighing down the company’s share price.
Multiple states, including California, Colorado, Kentucky, and New Jersey were seeking as much as $200 billion U.S. in penalties from Meta over claims its social media harmed children.
However, the company still faces numerous lawsuits from school districts and individuals, some of which are scheduled for trial later this year.
Analysts had referred to the state lawsuits against Meta as the company’s “Big Tobacco moment.”
Many of those analysts say this settlement could signal a turning point for social media companies that have avoided regulatory scrutiny over the harms their products cause to young people.
META stock has declined 23% over the past 12 months to trade at $576.14 U.S. per share.
