Tech giant Meta will pay up to roughly US$18 billion, plus make major design changes to Facebook and Instagram, as part of a settlement it has agreed to in its most recent lawsuit.

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Filed in 2023 by a coalition of 29 US state attorneys-general, the case alleged that Instagram and Facebook were engineered to keep teenagers hooked, that Meta misled the public about the harm, and that it collected data from children aged under 13 without parental consent.

The trial began just over a week ago. But instead of battling it out in court for four more weeks, the parties agreed to settle.

Even though Meta folded in this case, the settlement doesn't amount to an admission of wrongdoing, liability or violation of any laws. In a statement, Meta said: "Ensuring teens have a safe and productive experience on our platforms is an absolute imperative for Meta. We want to get this right for parents and teens, and that's why we partnered with state attorneys general to set a new industry standard."

This year has been brutal for Meta in court.

In March, a Los Angeles jury found Meta and YouTube liable for harming a young woman who joined Instagram at the age of nine.

The same week, a New Mexico jury found Meta had endangered children, ordering it to pay $567 million to address the youth mental health crisis. In August, a judge lifted that bill to $942 million.

In this most recent case, Meta said the states were seeking as much as $1.4 trillion in penalties. The states denied this, saying the maximum penalties could reach roughly $200 billion.

By settling now, Meta buys certainty and a cap on its public exposure. The states get money and product changes that no legislature has managed to pass.

The money has two layers. Meta will pay roughly $11.7 billion to 47 US states, plus the District of Colombia and three US territories, in 10 annual instalments, as well as $1 billion to Texas as part of a separate legal agreement. It will pay a further US$5.3 billion only if TikTok, YouTube and Snap sign up to the same rules and pay their own share.

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© Canberra Times