The social media giant Meta has reached a settlement with 29 U.S. states to resolve a lawsuit concerning the safety of children on Facebook and Instagram.

The technology company will pay up to $16.68 billion, according to Reuters.

According to court documents, the parent company of Facebook and Instagram agreed to settle claims brought by states across the United States, which accused it of designing its platforms in ways that encourage addictive use among minors, misleading consumers about their safety, and collecting children’s personal data without the required parental consent.

The agreement was reached while a federal trial was underway in California over claims brought by 29 states, preventing what would have been one of the largest legal tests to date of whether social media companies can be held liable for harm to young users.

Just days before jury selection was scheduled to begin, on August 12, a federal appeals court had rejected a request to halt the trial.

The allegations against Meta

The federal proceedings included lawsuits brought by the attorneys general of California, Colorado, Kentucky and New Jersey, who argued that Meta had violated state consumer-protection laws.

At the same time, the 29 states accused the company of violating the federal Children’s Online Privacy Protection Act (COPPA) by collecting personal information from users it knew were children without first notifying or obtaining consent from their parents.

According to the complaints, this data was also used to train machine-learning and generative AI models.

Meta has rejected the allegations, arguing that it has made significant efforts to protect children on its platforms. It also argued that it could not be accused of misleading consumers about whether its services are addictive because “social media addiction” is not a recognized psychiatric diagnosis.

States had discussed claims of up to $200 billion

Before the trial, Meta said in a court filing that the four states were seeking penalties that could potentially reach $1.4 trillion.

The states had not announced a specific amount, but before the proceedings began they said their actual demand would be closer to $200 billion.

In addition to monetary penalties, they were seeking further damages, significant changes to the design of Meta’s platforms, and restrictions on children’s ability to create accounts.

Thousands of lawsuits against social media companies

The case is part of a much broader wave of litigation in the United States. Snap, YouTube and its parent Alphabet, as well as TikTok and ByteDance, continue to face thousands of lawsuits in federal and state courts.

Plaintiffs argue that the companies knew certain features of their platforms could lead to compulsive use among children and teenagers and that, as a result, they contributed to a broader youth mental-health crisis.

Thousands of additional cases remain pending in state courts. In Los Angeles, a judge is overseeing a large number of lawsuits from people who claim that they or their relatives were harmed by the design of the platforms. Around 30 states have also filed their own lawsuits against the companies in state courts.

Meta’s previous defeats

The settlement comes after two significant legal defeats for Meta in a case brought by the state of New Mexico.

In March, a jury ordered the company to pay $375 million, finding that it had misled consumers about the safety of its platforms.

On August 6, a judge additionally ruled that Meta had created a “public nuisance” and imposed another $567 million penalty, along with requirements to implement measures protecting young users.

Earlier that same month, the first court ruling in an individual lawsuit against Meta and Google had also been issued. A Los Angeles court found the two companies liable for the depression and anxiety suffered by the plaintiff, identified as Kaylee G.M., and awarded a total of $6 million in damages.

The companies have announced that they will appeal those decisions.