Meta Platforms (META) traded at $569.29, down 0.13%, after the company reached an agreement to settle a major teen safety lawsuit involving 29 U.S. states. The settlement ended a legal battle over claims that Facebook and Instagram affected young users through platform design choices. Meta denied wrongdoing while agreeing to financial payments and new protections for teenage users.

The agreement followed a trial that had entered its second week in a California federal court. Under the settlement, Meta must introduce stronger controls for teenagers across its platforms. The deal includes payments of up to $18 billion and additional safety requirements.

Meta shares had earlier moved higher before losing momentum during the trading session. The market reaction came amid concern over the financial impact of the settlement. Meta also expects a legal expense of about $10 billion during the third quarter of 2026.

Meta Introduces New Teen Safety Rules After Settlement

The settlement requires Meta to apply new protections for users under 18 on Facebook and Instagram. The measures include daily time limits, nighttime restrictions, and stronger parental controls. Most of the agreement’s terms will remain in effect for 10 years.

Under the new rules, teenage users will receive a default two-hour daily usage limit across both platforms. Parents will gain greater control through expanded supervision features. Meta will also introduce school mode settings that reduce notifications during learning hours.

The company will provide options for teenagers to use non-personalized feeds and disable autoplay features. Meta will hide likes and reactions from teenage users by default. The platform will also strengthen age verification systems to identify younger users.

The agreement addresses concerns about unwanted contact and exposure to harmful content, which have drawn sustained attention from regulators and lawmakers as social media companies face broader scrutiny over youth safety. Meta will therefore maintain stricter privacy settings for teenage accounts. The company will also improve reporting tools and review protection systems on an ongoing basis.

Meta Faces Ongoing Regulatory Pressure Over Youth Protection

The settlement follows multiple legal challenges focused on how Meta designs its platforms. In earlier cases, the company faced lawsuits alleging that its products encouraged excessive use among young users. Meta has rejected claims that it intentionally harmed children.

These legal disputes differ from content moderation cases tied to Section 230 protections. Instead, the claims center on platform features and engagement systems. As a result, regulators have increased pressure on social media companies to improve youth protections.

Meta said the agreement is intended to establish stronger standards for teen safety across the industry. The company also encouraged other major platforms to adopt similar measures. The settlement could influence future policies across the social media sector.

Meta had already introduced youth protection tools before reaching the agreement. Those efforts include teen account features launched in 2024 with added privacy controls. The company continues to work with regulators and researchers on online safety issues.

Meta Settlement Adds New Financial Considerations

Meta faces additional costs after agreeing to resolve the lawsuit with state authorities. The company’s advertising business continues to support overall growth despite regulatory challenges. However, the settlement adds significant expenses during the current financial period.

The company will distribute settlement payments over a 10-year period. About 70% of the allocated amount will support participating states. The remaining funds depend on similar actions from other major platforms.

Meta’s agreement also includes independent oversight and annual compliance reviews. Those reviews will assess whether the company is meeting the required safety commitments. Meta will also support research into teenage online experiences.

The settlement adds another regulatory challenge as governments examine major technology platforms. The company continues balancing expansion plans with demands for stronger user protections. The agreement may shape future approaches to youth safety across digital platforms.