Facebook and Instagram parent company Meta has agreed to pay up to $17.1 billion to 48 states as part of a legal settlement, including up to $1.15 billion for New York. (AP Photo/Jeff Chiu, File) (Jeff Chiu/Associated Press)

ALBANY – New York may receive more than $1 billion from Facebook parent company Meta under a settlement agreement announced Wednesday as a trial was underway in a lawsuit brought against the company by a coalition of 48 states. 

New York was among the states that brought the case alleging its platforms like Facebook and Instagram are addictive and harmful to underage users in violation of the federal Children’s Online Privacy Protection Act. The announcement of a settlement ends a federal trial that had been ongoing in California against the company. 

“Children in New York and nationwide are suffering while companies like Meta reap immense profits by intentionally addicting them to their social media platforms,” New York Attorney General Letitia James said in a statement. “We cannot allow social media companies to continue fueling the growing rates of low self-esteem, isolation, and depression among our youth.” 

As part of the settlement, Meta must implement two-hour time daily limits on its social media platforms for users under 18, prevent minors from using them between the hours of midnight and 6 a.m., and prevent notifications from being sent during school hours. Meta will also pay the states up to a combined $17.1 billion, the full amount contingent on rival social media sites TikTok and Youtube implementing similar time restrictions on their respective platforms. 

Under the settlement, New York will receive a minimum of $819 million but up to $1.15 billion if the full amount is paid out. According to the attorney general’s office, the funds will be used for “a variety of educational and mental health services” for young people struggling with social media addiction, such as grants to schools to implement phone-free classrooms, training for mental health professionals and after-school programming. 

“We are taking a major step towards breaking the cycle of social media addiction,” James said. “This groundbreaking plan sets a standard of reforms for all social media platforms, and I will continue to work to extend these protections across the industry.”

Meta’s chief legal officer, C.J. Mahoney, said in a statement Wednesday that the company is committed to working with states to reduce harms for teens. 

“The framework we’ve negotiated will empower parents to easily manage how their children access our platforms,” Mahoney said. “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.”

The settlement announcement is the most recent step in New York’s efforts to try to curb the negative impacts of social media use by minors.

The state had already banned the use of cellphones during school hours beginning last year. The state has also passed laws that prevent social media companies from collecting personal data from minors and that restrict companies from using algorithms to entice users to stay on social media longer.

The SAFE For Kids Act, signed into law by Gov. Kathy Hochul in 2024 and finalized earlier this year, requires social media companies to determine each user’s age and only provide them with content from users and pages with which they deliberately connect.

Earlier this year, a bill sponsored by state Sen. Leroy Comrie aimed to pressure social media companies to crack down on fraudulent scams perpetrated on their platforms. That bill did not make it out of the committee level to the floor. 

In addition to Meta, New York also has an ongoing lawsuit with TikTok that was filed two years ago with 13 other states. It accuses the company of neglecting young people’s mental health and misleading the public about the safety of its platform. It also accuses TikTok of collecting and monetizing data on children under 13. 

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This article originally published at Meta may pay New York more than $1B under settlement.