Meta Platforms Inc. has agreed to pay $18 billion to resolve a high-stakes, multi-state lawsuit alleging the social media giant intentionally designed addictive platform features that severely harmed young users’ mental health.

The landmark deal, announced Wednesday, abruptly halts an ongoing federal trial in Oakland, Calif., where Meta executives — including Instagram head Adam Mosseri and Meta CEO Mark Zuckerberg — were set to give testimony.

The suit, co-led by California Attorney General Rob Bonta alongside a bipartisan coalition of state attorneys general representing 29 states, accused Meta of employing features such as infinite scrolling, push notifications, and algorithmic recommendations specifically engineered to hook children and teens. The states also alleged Meta misled the public regarding safety risks and unlawfully harvested data from children under 13 without parental consent.

Under terms of the proposed consent judgment, Meta will shell out the $18 billion over a 10-year period to fund state-level youth online safety initiatives. The total payout structure includes a $12.7 billion primary distribution to participating states, a separate $1 billion settlement resolved with the state of Texas, and previous legal allocations. About $5.3 billion of the total sum is tied to contingency clauses; that portion will be distributed if rival platforms, including TikTok and Alphabet Inc.’s YouTube, adopt similar youth-safety modifications and match proportional financial contributions.

“The enforceable product terms matter more than the payment, which could have been 10x what Meta agreed to,” said Mitch Ashley, vice president and practice lead for Software Lifecycle Engineering and AI-Native Software Engineering at The Futurum Group. “Meta agreed to age assurance, daily time caps, and overnight blocks that it now has to instrument, log, and prove for years under state oversight. The next level is the enforcement, penalties, and remedies (or failures).”

“That makes teen safety design an audited control with evidence requirements, and it sets the bar for consumer platforms with young users gets measured against,” Ashley said. “Watch what Meta can demonstrate about enforcement, because that is what oversight will test next.”

California is projected to receive up to $2.1 billion from the settlement. As part of the terms, all participating parties waived their rights to appeal.

In addition to the financial penalty, Meta committed to sweeping product transformations scheduled to take effect within months. Key features mandated by the agreement include a default two-hour daily time limit for teenage users across Facebook and Instagram; integrated “night mode” blocks to restrict late-night app activity; stricter age-assurance protocols to block underage children from creating accounts, along with augmented oversight tools for parents; and the appointment of an independent auditor to monitor platform compliance.

“Litigation would mean that we were still many years away from bringing any of these child safety upgrades to these platforms; it would risk losing another generation,” North Carolina Attorney General Jeff Jackson said during a Wednesday press briefing, framing the agreement as the largest tech settlement in history.

“Meta’s settlement highlights the consequences of leaving Congress’ job to courts, state lawmakers, and technology companies,” said Ash Johnson, policy manager of the Information Technology and Innovation Foundation. “This approach is a lose-lose-lose scenario: Companies face potentially massive litigation over standards that federal lawmakers have not established, courts face complex questions of public policy with scant legal precedent, and families face a confusing patchwork of rules that varies by state and platform. Congress should establish a clear national framework for protecting children online.”

Meta did not admit to any legal wrongdoing in the agreement. In a statement released Wednesday, the company emphasized its commitment to working alongside state regulators. “Ensuring teens have a safe and productive experience on our platforms is an absolute imperative for Meta,” the company said in an official blog post. “We want to get this right for parents and teens, and that’s why we partnered with state attorneys general to set a new industry standard.”

“Older adults, who are often less digitally fluent, remain highly vulnerable to scams, manipulation, and exploitation enabled or amplified by these platforms,” said Denise Brinkmeyer, president at JUMP Technology Services. “Far greater urgency, care, and accountability are needed from tech leaders when it comes to protecting both young people and seniors. Frankly, this is one area where government and human-services systems are leading the way.”

Meta disclosed it expects to record an unforecasted legal expense of roughly $10 billion in the third quarter of 2026 connected to the deal. Although the $18 billion total represents a small portion of the company’s annual revenue, mandatory daily caps on youth usage could pose long-term challenges to its primary ad-based business model.

Despite the resolution, Meta’s legal hurdles remain steep. The company recently faced significant adverse rulings in New Mexico over public nuisance and unfair practice claims totaling nearly $1 billion. Furthermore, Meta, TikTok, Snap Inc., and YouTube remain target defendants in hundreds of consolidated federal lawsuits filed by individuals, families, and school districts asserting ongoing child safety damages.

Michael Clements, executive director of the Business and Human Rights Center, said it is “increasingly clear that the legal shields that have long protected tech companies are not impregnable.”

The settlement, he added, “may signal a turning tide for Big Tech and its backers: A shifting calculus of risk in the boardroom and one that should prompt investors to question business models that have long prioritized speed and expansion over safety.”

Larry Magid, co-founder of ConnectSafely and member of Meta’s Safety Advisory Council, previously likened platforms to chocolate, which is harmless in moderation. However, he now argues the analogy fails because algorithms actively study users to keep them hooked. The change comes as Pew Research reports that the proportion of teens viewing social media’s peer effect as “mostly negative” surged from 32% in 2022 to 48% in 2025.

Commenting on the settlement, Magid praised new platform restrictions. “While it doesn’t address every possible harm, this settlement goes a long way towards making Instagram and Facebook safer for teenage users,” Magid said, highlighting measures that cap daily screen time and allow teens to disable addictive algorithms.

Added Ben Moore, U.S. managing director at BeReal: “Two hours of daily social time is finite, so every minute must be earned rather than captured. Platforms built around a defined moment, rather than infinite availability, were designed for exactly that. The industry is about to find out which attention was chosen and which was just harvested.”