Meta to pay New York up to $1 billion of potential $17 billion social media addiction settlement

The New York Attorney General’s office was one of the prosecutors in 47 states that reached a whopping settlement of up to $17.1 billion with Meta over the platform’s damage to youth mental health — with around $1 billion going to New York.

The agreement put an end to a landmark multi-state lawsuit from 2023 that accused the company that operates Instagram and Facebook of fomenting a mental health crisis in young people through a financial model that maximizes attention while downplaying or misrepresenting the dangers of its products.

As part of the settlement, Meta will be required to restrict the time young users can spend on its platforms per day and take stricter measures to verify user ages in addition to paying out the damages that in New York will go to “educational and mental health services,” according to the AG’s office.

“We cannot allow social media companies to continue fueling the growing rates of low self-esteem, isolation, and depression among our youth,” said AG Letitia James in a statement. “With significant new resources for our communities and comprehensive restrictions on Meta’s platforms for young people, we are taking a major step towards breaking the cycle of social media addiction.”

James’ office said it was involved in negotiations to reach the landmark settlement. The funds are slated to go toward programs to alleviate mental health stress in children, but it is too early to specify what those programs will be. 

In its announcement, the AG said the fund could supply grants to schools to administer phone-free rules in classrooms, training for student-focused mental health professionals, after-school or summer programming and public health programs.

Meta also agreed to pay out more if its competitors implement some of the same limits. The tech giant will initially pay $12.1 billion, but that total could increase depending on whether other social media companies like YouTube and TikTok also settle with the states and agree to financial penalties and product changes. 

“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’s Chief Legal Officer C.J. Mahoney said in a statement.

The New York AG’s office is a part of a separate multistate lawsuit against TikTok alleging that it has misled users about the safety of its platform, particularly for children.

As part of the Meta settlement, New York will receive at least $819 million and could receive up to $1.15 billion if other platforms agree to take on the same additional safety measures. 

The state AG office’s participation in the suit follows other efforts around fighting the mental health toll of social media. Several years ago, James championed state legislation called the SAFE for Kids Act, which required social media companies to restrict algorithmic feeds and nighttime notifications for children.