Meta to Pay Up to $18B, Tighten Teen Access Under Landmark US Settlement
Synopsis
The company will pay up to $18 billion over the next decade to resolve claims brought by nearly all US states that Facebook and Instagram were designed to addict children, while agreeing to stricter limits on teenage use; the states had been expected to seek nearly $200 billion in penalties.
Meta settlement will require the company to pay up to $18 billion over the next decade and impose stricter controls with the use of teenage Facebook and Instagram.
The deal was announced on August 26 and ends a lawsuit filed by almost all US states who alleged that Meta intentionally engineered its apps to keep children hooked and deceived them about safety.
Teen restrictions form the core of deal
Under the settlement, Meta will make maximum payments of about $16.7 billion to 47 states, Washington, D.C., Puerto Rico, American Samoa and the Northern Mariana Islands. This is estimated to be approximately $12.7 billion guaranteed, and an additional $5 billion contingent upon the development of similar protections on TikTok, YouTube, and Snapchat.
The deal also contains $459 million to settle state privacy claims related to the Cambridge Analytica scandal. California is currently receiving an estimated $2.2 billion, New York an estimated $1.1 billion and Texas has its own settlement valued at over $1 billion.
For teens, Facebook and Instagram will have a default limit of two hours per day, across both platforms. The access will be limited from midnight to 6 a.m., and most of the push notifications will be silenced from 8 a.m. to 3 p.m. during school hours.
The states had been expecting that they would look for almost $200 billion in civil penalties in the case of California, Colorado, Kentucky and New Jersey. As part of the settlement, Meta had made no claims of guilt.
Australia already has separate age rules
Australia has its own social media age restrictions and the Meta $18 billion settlement is coming. This change was imposed on age-restricted platforms since 10 December 2025, and it obliges these platforms to make reasonable efforts to prevent Australians under 16 from creating and maintaining an account on the platform.
In addition, the settlement is relevant to businesses operating across the US and Australia due to the differences in the requirements of the young users in those markets.
The US agreement is geared towards usage controls when teenagers are involved, whereas Australia's law is about age restrictions on accounts on covered platforms.
Meta financials put settlement in context
Meta's earnings report for the second quarter of 2026 indicated $60.801 billion in revenue, which is 28% higher than it was in the same quarter last year. Net income was $15.848 billion compared to costs and expenses of $42.026 billion, of which $2.40 billion were legal proceeding charges.
As of June 30th, Meta also had $90.26 billion in cash, cash equivalents and marketable securities, and spent $31.08 billion on capital expenditures during the quarter.
Source: Reuters
Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
