Settlement 'marks a change of strategy for Meta'

META will pay up to US$18 billion over the next decade and strictly limit how teenagers use Facebook and Instagram under an agreement with nearly all U.S. states to resolve claims it designed those social media platforms to addict children.

The settlements announced on Wednesday (August 26) end a federal trial over allegations Meta's products harmed children and the company misled the public about their safety. Four of the states — California, Colorado, Kentucky and New Jersey — were expected to seek close to US$200 billion in civil penalties.

“The settlement marks a change of strategy for Meta," said University of California Berkeley School of Law professor Stavros Gadinis.

"They're embracing the idea that they need to do more. They are appearing as the industry leader, the author of reforms, and they want other companies to follow their lead,” he said.

While Meta will not undergo a fundamental overhaul, the accords represent a sweeping effort to define how it serves young users. It could provide a template for resolving thousands of other lawsuits against social media companies. Governments around the world are trying to curb children's access to harmful online content, including a ban in Australia on social media for children under 16.

"We need to see whether these measures will be enough," said Gadinis. "But Meta’s board is put on notice that this is a critical risk for the company that it needs to continue to oversee. And if it doesn't, consequences may follow.”