Meta will pay up to $18 billion and cap teen time on Facebook and Instagram

Meta Platforms agreed on Wednesday to pay as much as $18 billion and to change how teenagers use Facebook and Instagram, settling a lawsuit by dozens of U.S. states that accused the company of designing products that addict children. Meta denied wrongdoing. The agreement, filed in the Northern District of California, ends a trial that would have put internal documents on young users into the public record.

The guaranteed piece is about $12.7 billion to participating states and territories, paid over ten years. A further $5.3 billion becomes due if YouTube and TikTok accept matching one-hour daily limits, a night-time safety mode, age checks and a matching payment. Roughly 30 percent of some states' recoveries is written the same way: contingent on rivals signing up.

What changes inside the apps

For users under 18 in the United States, Facebook and Instagram will default to a combined two-hour daily cap, with mandatory pauses after 15 minutes of continuous use and again at 60 and 90 minutes. Those limits last five years. If Snapchat, TikTok and YouTube take comparable terms, the daily cap on each Meta app drops to 60 minutes for ten years.

The deal also requires blocks on night-time use, limits on notifications during school hours, and a ban on plastic-surgery filters for young accounts. A research foundation will study teenage well-being online. California Attorney General Rob Bonta said the product changes would arrive within months and went beyond what a court was likely to order at trial. Colorado Attorney General Phil Weiser called the relief more useful than a pure damages verdict.

State-level numbers vary. California is in line for $1.5 billion to $2.1 billion. Colorado about $615 million. Tennessee published $751.9 million, directed to a Children's Digital Protection Fund. New Hampshire published a ceiling of $224.3 million, with about 70 percent guaranteed. Tennessee's attorney general, Jonathan Skrmetti, called it the largest state consumer-protection settlement with a technology company.

What did not change

The settlement leaves standing the personalised feeds and ad targeting that produce most of Meta's profit. Reuters noted that the company earned more than $60 billion last year and that the share price rose about 1 percent after the announcement. Before trial the states had spoken of penalties on the order of $1.4 trillion. The agreed ceiling is two orders of magnitude smaller and is spread across a decade.

Eric Goldman, a professor at Santa Clara University School of Law, observed that the contingent slice puts Meta and the attorneys general on the same side against competing apps. If TikTok and YouTube refuse, Meta keeps $5.3 billion and keeps the looser two-hour cap. If they accept, every large short-video and social app in the U.S. youth market is under a similar clock.

Instagram head Adam Mosseri had told state lawyers about a month earlier that Meta would appeal any adverse verdict, as it is already doing after a New Mexico child-safety ruling. The settlement avoids that appeal path for this case. It does not bind future private suits or foreign regulators.

The test after the press release

Default caps only work if age checks work and if parents cannot switch them off without noticing. The agreement's value for families will be measured in logs: how many under-18 accounts actually hit the pause, how many move to an app that is not bound, and whether the night-time block holds on a school night. The money will arrive on a schedule. The product changes have a date that is closer. That is the part of the deal that is new. U.S. law had not previously forced Meta to alter the everyday session of a teenage user on this scale.