CHANGING THE ONLINE EXPERIENCE

Meta agreed to make maximum payments of about US$16.7 billion to 47 US states, Washington, DC, Puerto Rico, American Samoa and the Northern Mariana Islands.

California could receive a US$2.2 billion payout, while New York could receive US$1.1 billion. Texas reached a separate settlement worth more than US$1 billion.

Some states will deposit funds they receive in general accounts while others will earmark portions to address children's mental health.

Meta guaranteed payments of about US$12.7 billion, with another US$5 billion contingent on whether Snap Inc's Snapchat, ByteDance's TikTok and Alphabet's YouTube impose similar protections for children. Those companies were not immediately available for comment.

"This is a big deal," said James Speta, a Northwestern University law professor who specializes in telecommunications and internet policy.

"Meta and other companies were facing pressure to change business practices whether or not they lost the lawsuits, from the public and from Congress and state legislatures," he continued. "These restrictions will change the experience on Instagram and Facebook, and they are designed to reduce engagement."

Wednesday's settlements also call for Meta to pay US$459 million to resolve states' privacy claims related to the Cambridge Analytica scandal, where a British consulting firm collected personal data of millions of Facebook users without authorization.

The main settlement, which does not include Texas, requires approval by US District Judge Yvonne Gonzalez Rogers, who oversaw the trial that began on Aug 18.

Instagram head Adam Mosseri had begun testifying, and Meta Chief Executive Mark Zuckerberg had been expected to testify.

At a Wednesday hearing, Gonzalez Rogers called the settlement "a good step forward" and said she expected to grant approval.

"I don't want to suggest that there's anything with this agreement that I am particularly concerned with," the judge said. "I am quite happy to not have to finish up this trial."

MENTAL HEALTH CRISIS

Social media companies still face thousands of lawsuits in federal and state courts by individuals, school districts, municipalities and other government entities claiming they knowingly sought to addict children, and caused a mental health crisis including harms such as anxiety, depression and suicide. Gonzalez Rogers oversees many of these cases.

The Meta trial included claims by California, Colorado, Kentucky and New Jersey that the company's conduct violated state consumer protection laws.

It also included claims by 29 states that Meta ⁠violated the federal Children's Online Privacy Protection Act by knowingly collecting personal data from children without parental consent and using the data to train generative AI.

Meta had long argued that it could not have misled consumers because "social media addiction" was not a recognized psychiatric condition.

Before the trial began, Meta said California, Colorado, Kentucky and New Jersey were seeking up to US$1.4 trillion in penalties.

Earlier this month, a New Mexico judge ordered Meta to pay US$567 million and implement youth safety measures, in addition to US$375 million that a jury ordered Meta to pay in the same case in March for misleading users about its platforms' safety.

Also in March, a Los Angeles jury found Meta ​and Alphabet's Google negligent in designing their platforms, and ordered them to pay US$6 million to a 20-year-old woman who said she became addicted to Instagram and YouTube as a child.

Meta and Google have said they will appeal those verdicts.

New Mexico was not part of Wednesday's settlements.

The state's Attorney General Raul Torrez said the resolution missed some changes that his case spurred in New Mexico, including safeguards against adults targeting children and banning sexualized AI chatbot interactions with children, yet "represents real progress and adds momentum to finish the job of protecting kids online."

Florida also did not settle, and plans to keep litigating.

"The payouts to the states are peanuts compared to the profound harms Meta’s profit-driven addictive features have inflicted on our children," Florida Attorney General James Uthmeier said in a statement. "We’ll see them at trial."