Meta Platforms will pay roughly $17 billion over the next decade and overhaul how Instagram and Facebook operate for teenagers, ending a landmark trial that accused the company of deliberately engineering its apps to be addictive to kids. The deal, announced Wednesday, resolves claims brought by 47 states plus the District of Columbia and several U.S. territories, cutting short a federal trial in Oakland, California, that had only just begun.

The payout, one of the largest corporate settlements ever tied to child safety, will land in annual installments over 10 years. Individual states disclosed their cuts almost immediately: Virginia expects $353 million guaranteed plus $11 million tied to separate data-sharing claims, while Colorado said it would receive roughly $615 million. Meta told investors it will book a $10 billion charge against current-quarter earnings to cover the deal. Shares popped nearly 4% in premarket trading before giving back most of the gain once regular trading opened, as Wall Street judged the number far lighter than the up-to-$200 billion worst-case scenario some analysts had floated.

Two-Hour Limits, Midnight Blackouts

Beyond the check, Meta agreed to a sweeping list of product changes for under-18 users: a two-hour combined daily time limit across Instagram and Facebook with forced pauses at 15, 60 and 90 minutes; a nighttime lockout blocking access from midnight to 6 a.m.; a halt to push notifications during school hours; bans on beauty and cosmetic-surgery filters and visible "like" counts for minors; tougher age verification; and an option for a non-personalized feed stripped of algorithmic targeting. An independent auditor will monitor compliance annually for five years, with the states alleging Meta violated the Children's Online Privacy Protection Act by harvesting data from users under 13 without parental consent.

The suits, filed starting in 2023 by a bipartisan coalition of attorneys general, argued Meta's own internal research showed it knew Instagram worsened body-image issues and mental health outcomes for teen girls yet concealed that from the public. The Oakland trial, overseen by U.S. District Judge Yvonne Gonzalez Rogers, was expected to run into October and had already featured testimony from Instagram chief Adam Mosseri defending the platform's safety record before the settlement talks accelerated.

"Meta has agreed to make massive transformations that will reduce the risk of harm from its platforms — and will do it within months."

That's California Attorney General Rob Bonta, whose office led the case alongside Colorado, Kentucky and New Jersey. Meta's chief legal officer, C.J. Mahoney, called the settlement framework "groundbreaking" and pointedly urged rivals TikTok and YouTube to adopt similar safeguards — notably, roughly 30% of the payout is structured to be released only if competing platforms match Meta's new safety commitments and contribute comparable sums, according to terms reported by financial outlets tracking the stock reaction.

The settlement still requires approval from the federal court, and Meta faces a separate wave of lawsuits from school districts and individual families that were not part of the multistate action. For now, the immediate market verdict is relief: analysts at multiple firms reiterated bullish price targets on Meta stock Wednesday, framing the deal as removing a years-long legal overhang even as the company absorbs its biggest one-time charge of the year.