Tech giant Meta has reached an $18bn settlement with 29 US states concerning a landmark lawsuit alleging that its Facebook and Instagram platforms caused harm to children. The agreement, announced on Wednesday, led to an increase in Meta's share price, which initially surged by 5% before stabilising at a gain of just over 1.25%.
The settlement includes several changes to how young people use Meta's platforms. These include a two-hour daily usage cap, restricted access during night hours and the school day, and the removal of automatic display of 'likes'. Additionally, various safety and parental supervision measures will become default standards rather than opt-in extras.
However, the $18bn sum is less than a month's revenue for Meta and is to be paid over 10 years. Nearly a third of this amount is contingent on YouTube and TikTok agreeing to similar restrictions. The financial penalty represents less than a tenth of the $200bn the states sought, and Meta has not made an admission of liability as part of the agreement.
The new restrictions apply only within the US. Critics suggest that teenagers may find ways to circumvent these measures, and Meta will not be held accountable if they do. Furthermore, Meta itself will continue to define what constitutes harm under the terms of the deal.