The company Meta and a coalition of state attorneys general have settled a large-scale federal lawsuit. It concerned allegations that the social media giant misled about the extent of harm to children’s mental health associated with the use of apps such as Facebook and Instagram.
The terms of the settlement were made public in a court document filed on Wednesday. According to it, Meta must make a number of changes to the operation of its apps. These include daily usage limits and “nighttime blockings” for teenagers using Facebook and Instagram. The company must also introduce “enhanced age verification measures” that will prevent children from using the apps, as well as provide parents and guardians with additional control tools.
As part of the agreement, Meta agreed to pay 12.6 billion dollars, with 7% of this amount to be paid immediately, according to CNBC journalist Jim Cramer. After the news appeared, the social media giant’s shares rose by 5% during pre-market trading.
Trial and testimony from management
The agreement was reached in the second week of the trial, which took place in federal court in Oakland. The case is jointly led by California Attorney General Rob Bonta and the attorneys general of the states of Colorado, New Jersey, and Kentucky. They represent a bipartisan group of 29 attorneys general in a consolidated case that arose after a lawsuit filed in 2023.
The settlement was reached the day after Instagram head Adam Mosseri testified that he does not instruct employees to hide certain information from him about child safety and company products to protect himself in the event of potential lawsuits.
Since the federal trial took place in Meta‘s home state of California and involved lawsuits from several states, the case was of particular significance to the company headed by Mark Zuckerberg.
Source: CNBC
