Meta, U.S. States Discuss Settlement in Teen Addiction Trial

Meta Platforms and attorneys general representing several U.S. states have held discussions over a potential settlement as the Facebook and Instagram parent faces a federal trial over allegations that its social media platforms were deliberately designed to encourage addictive behavior among teenagers, Bloomberg News reported Wednesday.

The reported Meta settlement talks emerged during the second week of the trial in Oakland, California. A coalition of 29 states is seeking financial penalties as well as changes to how Meta designs and operates Facebook and Instagram, particularly features used by younger audiences.

Meta has rejected the allegations and argued that the proposed platform changes and potential financial penalties sought by the states are unreasonable.

California, Colorado, Kentucky and New Jersey are leading the case. The states allege that Meta knowingly created Facebook and Instagram features that encouraged teenagers and other young users to spend prolonged periods on the platforms and develop compulsive usage habits. They also accuse the technology company of misleading consumers about measures intended to protect young users.

The lawsuit is part of broader scrutiny facing social media companies over teen mental health, online safety and the design of features intended to increase user engagement.

According to Bloomberg, Meta has estimated that an unfavorable verdict could potentially expose the company to penalties of up to $1.4 trillion. Any negotiated settlement, however, would likely be substantially smaller than that figure.

The ongoing Meta trial has included testimony from Instagram chief Adam Mosseri as well as current and former employees of the company. Meta CEO Mark Zuckerberg is also expected to testify as proceedings continue.

A settlement could potentially bring an early resolution to the closely watched dispute, although the reported discussions do not guarantee that the two sides will reach an agreement. The outcome could have significant implications for Meta and the wider social media industry as U.S. regulators and state governments increase pressure on technology companies over protections for children and teenagers online.