Meta has agreed to an $18 billion settlement with a coalition of U.S. states over claims its platforms harmed younger users, with $5.3 billion of that sum contingent on TikTok and YouTube adopting similar teen-safety measures.
Meta has reached an $18 billion settlement with a coalition of U.S. states over allegations that its platforms misled the public about the harms posed to younger users, a resolution that is now turning legal and regulatory pressure squarely on competitors including TikTok, YouTube, and Snap.
The agreement was struck during the second week of a trial brought by tens of states in Oakland, California, ending what had become a closely watched courtroom battle over social media's effect on adolescent mental health.
Under the terms of the settlement, Meta will pay 70 percent of the total amount — approximately $12.7 billion — to the states over a period of 10 years. The remaining $5.3 billion is conditional: Meta is only obligated to pay it if rivals TikTok and Alphabet's YouTube adopt similarly significant changes to their platforms for users under the age of 18.
In addition to the financial terms, Meta committed to a series of platform changes for younger users, including a two-hour daily usage limit that only a parent can override, the disabling of extreme makeup and cosmetic surgery filters, tighter age verification measures, and a night mode feature.
California Attorney General Rob Bonta, who co-led the case alongside attorneys general from New Jersey, Colorado, and Kentucky, said the settlement sends a clear message. "Gives notice to others in the industry that we're not done, and we expect similar outcomes from them as well," Bonta said in a statement.
In an interview with CNBC on Thursday, Bonta said he approved of Meta's decision to call out other platforms within the settlement terms. "That is appropriate. This is something that requires an industry-wide solution," he said.
Bonta confirmed that California is currently pursuing active litigation against TikTok. "We are suing TikTok now so we are looking to ensure that they adopt the similar practices and commitments that Meta did, and we are very interested in Snap and YouTube as well," he told CNBC. Bonta, New York Attorney General Letitia James, and 14 other state attorneys general filed a lawsuit against TikTok in 2024 for allegedly violating consumer protection laws and harming younger users with addictive features.
Rob Lalka, a professor of practice in management at Tulane University and author of "The Venture Alchemists: How Big Tech Turned Profits Into Power," said the settlement's pressure on competitors is likely to prompt preemptive action. "No company wants what Meta faced in Oakland," Lalka told CNBC. "I'd expect TikTok, YouTube, and Snapchat to make changes before they ever face that scene."
Lalka added that the reputational dimension of the settlement extends beyond legal liability. "These platforms depend entirely on being trusted, by parents, by users, by advertisers, and the settlement reflects a business decision about reputational risk, which now the boards of these other companies must also make."
The settlement comes after a string of legal setbacks for Meta. Earlier this year, the company and YouTube lost a social media addiction trial in Los Angeles brought by a plaintiff who claimed her mental health was damaged by features including autoplay and infinite scrolling. Meta also lost a separate case brought by New Mexico Attorney General Raul Torrez, after a court found the company violated the state's child-safety laws and ordered it to pay over $900 million in penalties.
Lalka cautioned against reading Meta's newfound positioning on teen safety at face value. "Let's be clear about how we got here. It took attorneys general stepping in after the harm was already done, because Congress never passed a law to prevent it. These new rules didn't come from elected policymakers, they were negotiated in a settlement with the company being regulated, and Meta is seeking to ensure its competitors will face the same rules," he said.
Bonta said the state intends to stay active on the issue broadly. "We'll be continuing our fight across social media," he said, noting ongoing communication with Snap and active conversations with TikTok, with the goal of bringing YouTube to the table as well.
Whether the conditional $5.3 billion payment ultimately materializes will depend on how quickly — and willingly — the rest of the industry moves to match the commitments Meta made in Oakland.
Jay Goldberg is a staff writer at TechEchelon covering technology, markets, and policy. He files the breaking news and deal coverage that move the publication's core desks.
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