Meta reached a deal on Wednesday (26) worth up to $18 billion with 48 US states to end lawsuits accusing the company of designing Facebook and Instagram to get children and teenagers hooked. Beyond the payout, the company agreed to restrict use of its platforms by under-18s in the United States. Governments in several countries read the concession as proof that big techs already hold the protection tools they spent years calling unworkable, according to reporting by Reuters and Al Jazeera.
Under the agreement, users under 18 get a default two-hour daily limit on the apps, a night curfew from midnight to 6am, hidden likes and reactions on children's accounts, a ban on appearance-altering filters and a block on most push notifications during school hours, from 8am to 3pm. Some of these settings can only be changed with parental consent. Meta denied any wrongdoing. The money will be paid over ten years, with up to $16.7 billion going to 47 states, Washington, DC, and US territories; California could receive $2.2 billion and New York $1.1 billion, Al Jazeera reported.
The original lawsuit, filed in 2023, accused Meta of encouraging compulsive behavior, failing to verify users' ages and collecting data from children under 13 without parental consent, in violation of COPPA, the US children's online privacy law. This year alone, the company had already lost two similar cases, including one brought by the state of New Mexico that led to orders to pay $375 million and, later, $567 million.
To gauge the real weight of the penalty, consider the math: Meta's 2025 revenue was $201 billion. Spread over a decade, the entire settlement costs the company less than 1% of a single year's revenue per year. The business model explains the resistance. Facebook and Instagram are free because the product on sale is user attention, measured in minutes of screen time and resold to advertisers. Think of a diner that profits for every minute a customer stays seated: the longer they stay, the more the house earns. Capping teen use hits that revenue engine directly, which is why the company only accepted the limits under legal pressure.
Global reaction
Australia's Communications Minister, Anika Wells, told Reuters that social media companies "have at their disposal the tools to protect young people from their addictive features, but have chosen not to use them". Australia was the first country to ban social media for under-16s, in December last year, but enforcement has been uneven: studies, including by the local internet regulator, indicate that 80% of minors were still on the platforms months after the ban took effect, which led Parliament to double the maximum fine.
South Korea's media regulator argued that measures like those in the deal should apply worldwide, and Malaysia, which bans accounts for under-16s, welcomed the decision. The European Commission, which earlier this year reached preliminary findings that Meta violated the Digital Services Act (DSA), the European Union's platform regulation law, is demanding changes that go beyond the US deal, such as turning off infinite scroll and video autoplay by default. "We have been very clear. We expect proper management of screen time and proper parental control on these platforms", said spokesperson Thomas Regnier. The precedent may also spawn lawsuits outside the US: Australian class action firm Shine Lawyers is in talks with Mark Lanier, the lawyer in the California case, about a similar action, and the Philippines hopes to use the deal as leverage in negotiations with Meta over online child sexual exploitation and financial scams.
What we still do not know
A dose of skepticism is warranted here. The settlement does not force Meta to touch the core of the business: personalized recommendations and targeted advertising remain untouched. It is also unclear how age verification will work, the exact point where Australia's ban stumbled, or whether the restrictions will be extended to users in other countries without fresh regulatory pressure.
In practical terms, watch three things: whether Meta applies the limits outside the US (South Korea and the European Commission have formally asked for that), how age verification gets solved, and whether the legal precedent reaches Brazil, where the debate on protecting minors is advancing and data protection authority ANPD has already fined TikTok R$ 153.7 million (about $28 million) over failures in this area, according to G1. For parents, the immediate change is concrete: parental control tools on these platforms are likely to become more visible and more robust, and it is worth reviewing the settings on your children's accounts.