Meta is accused of creating products designed to keep young users hooked while failing to protect them from harmful effects|Musicalartist071|CC BY-SA 4.0

The tech giant is set to pay as much as $18 billion over the next decade as it agrees to tougher rules for teenagers using Facebook and Instagram.

The deal settles a major legal fight brought by California along with other states, accusing Meta of creating products designed to keep young users hooked while failing to protect them from harmful effects and gathering data from children younger than 13 without parental consent.

Under the settlement, the 47 states will receive about $12.7 billion over the next decade. Another $5.3 billion is contingent on Snapchat, ByteDance’s TikTok, and YouTube implementing similar child-safety measures and matching that amount with their own contributions.

Meta denied wrongdoing while agreeing to new restrictions for teens.

Stricter screen limits
The new rules will place clear limits on young users’ activity. Facebook and Instagram will generally restrict teenagers to two hours of use each day and block access from midnight to 6 a.m. unless parents approve. Meta will also cut most notifications during school hours and strengthen controls around age-restricted material.

The social media giant will also make likes and reactions invisible to minors by default and restrict access to “extreme makeup filters.” However, the tech giant will not have to remove personalized recommendations or targeted advertising, leaving key parts of its business model intact.

The agreement also includes $459 million related to privacy claims stemming from the Cambridge Analytica scandal.

The settlement removes the biggest threat Meta faced in the trial, where the states were seeking as much as $1.4 trillion, nearly the company’s entire market value.

The company’s shares fluctuated throughout the day but ended slightly higher.

Additional lawsuits
Florida AG James Uthmeier is not part of the settlement and is suing Meta separately. The company also faces lawsuits from individuals and school districts, which it plans to contest.

The recent settlement could reshape how social media companies design services for young users, as governments and families continue demanding stronger online protections.