The tech giant has also agreed to make a series of changes to its apps, but still denies any wrongdoing.
Meta has agreed to pay up to $16.68bn as part of the settlement in the social media addiction case.
The case was brought by a coalition of 29 US states, co-led by California attorney general Rob Botana and attorney generals from Colorado, New Jersey and Kentucky.
Court papers stated the group alleged Meta knowingly designed Facebook and Instagram to be addictive for children, misled consumers about the safety of its platforms, and improperly collected personal data of children who use its platforms.
The settlement was reached during a trial, which began last week in Oakland California. According to Botana, California could receive between $1.5bn to $2.1bn of the $16.68bn the tech giant has agreed to pay, if the court approves the settlement.
As part of the agreement, Meta must also make changes for teenagers using Facebook and Instagram across the US, which include capping daily usage, nighttime blocks and enhanced age assurance measures, the court report read.
Bonta said in a statement: “Today, we have secured a settlement with Meta that will make social media less dangerous for our kids and make a world of a difference for children and their families.
“Meta has agreed to make massive transformations that will reduce the risk of harm from its platforms – and will do it within months.”
The California-headquartered social media firm has denied any wrongdoing in agreeing to settle the case.
Before the trial began, the states were seeking up to $1.4trn in damages from Meta.
On the agreement, CJ Mahoney, chief legal officer at Meta, said: “I’m pleased to announce that Meta has reached an agreement with a bipartisan group of state attorneys general from around the country on a new set of rules governing teens’ use of social media.
The framework we’ve negotiated will empower parents to easily manage how their children access our platforms. Our new time limit commitments, night mode features and usage limits during school hours set the right path forward for our whole industry, but this framework will only work if all our peers join us.
“Because teens move fluidly across dozens of apps, we need an industry-wide solution. We therefore call on our industry peers, TikTok and YouTube, to implement this new framework, right away. As a parent, I’m proud of both the work Meta has done to protect kids historically, and of this new groundbreaking agreement. But its success depends on all other social media platforms following Meta’s lead.”
Meta, Snap, YouTube (and its parent company Alphabet) and TikTok still face many more lawsuits in both federal and state courts over claims they knowingly designed their platforms to be addictive, which in turn has caused harm to children by fuelling a mental health crisis.
