Meta Platforms has agreed to pay out as much as $16.68 billion to settle state claims that it designed Facebook and Instagram to addict children, deceived consumers about the platforms’ safety, and collected personal data from children who used the platforms, according to court filings made public on Aug. 26.
The settlement comes after a federal trial began on Aug. 18. The company denied allegations by 29 states that it deliberately tried to get children addicted to its Facebook and Instagram platforms at a federal trial that began in California.
Meta had a total market capitalization of approximately $1.39 trillion on Aug. 18. Its stock price rose in early trading after news of the settlement spread, pushing its total market capitalization to $1.44 trillion.
Meta had estimated that it could face up to $1.4 trillion in penalties, although state attorneys general had said the figure could have been closer to $200 billion.
The states claimed that Meta misled consumers and designed Facebook and Instagram in such a way that they would hook young users, leading to increased anxiety, depression, and even suicide.
The 29 states alleged in their lawsuit that Meta has violated the federal Children’s Online Privacy Protection Act by collecting personal information from children younger than 13 without obtaining proper parental consent.
Reuters contributed to this report.
This is a developing story that will be updated.
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