Meta Platforms settles $18 billion social media addiction lawsuit, limits teens to 2 hours a day

[Financial News]  

Meta Platforms ended a landmark case on the 26th (local time) with a settlement worth up to $18 billion, or about 25 trillion won. The lawsuit accused the company of failing to protect children from social media addiction. The settlement is the largest ever in a U.S. case against a single company.

According to the Financial Times and other foreign media, Meta, the parent company of Facebook and Instagram, agreed to pay $16.68 billion, or about 23 trillion won, to 47 U.S. states, Washington, D.C., and three U.S. territories, including California. With a separate $1 billion settlement with Texas, the total settlement amount rose to as much as $18 billion. The deal also includes a condition that Meta will not admit wrongdoing.
The full $16.7 billion will not be paid at once. Meta will first pay about $11.7 billion, and if other major social media companies such as TikTok, YouTube, and Snapchat reach similar settlements with state governments in the future, additional payments will raise the total to about $16.7 billion. Meta said about $5.3 billion is contingent on YouTube and TikTok paying the same amount and agreeing to usage restrictions.
New Mexico, which previously won a separate fine against Meta through litigation, and Florida, where a separate lawsuit is still pending, were excluded from the settlement. The agreement must be approved by the court before it becomes final.

The size of the settlement is more than twice the $7.4 billion agreement Purdue Pharma and the Sackler family reached last year over the opioid crisis triggered by the painkiller OxyContin.
California Attorney General Rob Bonta said he expects the settlement to make "social media less dangerous for our children and create a different world for children and their families." He said the large payment will force Meta to make "major changes" within months.

Meta also agreed to limit social media use by teenagers.
Users under 18 will be allowed to use Facebook and Instagram for only two hours a day combined. Access will be blocked from midnight to 6 a.m. by default, and the restriction can be lifted only with parental approval.
If competitors also accept teen time limits, the daily limit will be reduced further to one hour, and nighttime access will be blocked from 10 p.m. to 7 a.m.
During the school term, a "school mode" will also apply from 8 a.m. to 3 p.m. on weekdays, disabling notifications except for direct messages.

Teen accounts will also be excluded from the AI-driven algorithms that continuously recommend content. They will be able to choose a "non-personalized feed" that shows only posts from accounts they have chosen to follow, in chronological order.
Teen users will also not be able to see the number of reactions, such as likes, on their own posts or on others' posts. They will also be barred from using photo filters that make them appear to have had plastic surgery or makeup applied.
Teen accounts will be private by default, and measures will also be introduced to prevent strangers and adults from finding or contacting teenagers.
Meta has agreed to build age-verification technology to prevent users aged 13 to 17 from signing up for adult accounts by entering an adult birth date. It will also develop an AI model to block access by children under 13, who are not allowed to sign up, and must report the results of its annual efforts to identify and delete underage accounts that signed up without authorization.
However, these restrictions will not apply to messaging services such as WhatsApp.


[email protected] Song Kyung-jae Reporter