Meta Platforms Inc. has settled a landmark case over claims that the social media giant failed to protect young users.
The deal announced Wednesday will see Texas receive more than $1 billion of a total $17 billion the Facebook and Instagram parent agreed to pay. The company also will put new guardrails on its platforms, including restricting how much time youths can scroll and preventing them from switching off certain safety settings without parental consent.
The negotiated settlement covers Texas and the 46 other states that sued the tech giant in 2023. The deal cuts short a trial that began last week, which was expected to see CEO Mark Zuckerberg take the stand before a jury in federal court in California.
RELATED: Texas lawsuit accuses Meta, WhatsApp of misleading users on privacy
Meta denied liability and fault in the settlement, which heads off estimated penalties of as much as $1.4 trillion it lost in court.
In Texas, the payout will be used for youth mental health services, crisis resources, digital literacy initiatives, after-school programs and grants for Texas schools.
"This is a historic settlement and a major win for the safety of Texas children. Not only will Meta pay over $1 billion to Texas, but the company will also implement significant new safety features to better protect children's precious minds and well-being on its platforms," Attorney General Paxton said in a statement.
Texas has passed laws in recent legislative sessions to give parents more control of their childrens' use of apps on phones.
Meta's payout is coming a year after hundreds of millions of dollars were cut from federal programs intended to help with school mental health.
Other changes the company promised include hiding social comparison features such as like counts, limiting notifications during school hours, increasing age verification and limiting scrolling and feed access on teen accounts from midnight to 6 a.m.
The federal lawsuit was the result of an investigation led by a bipartisan coalition of attorneys general from California, Florida, Kentucky, Massachusetts, Nebraska, New Jersey, Tennessee and Vermont. It followed reports, first by The Wall Street Journal in 2021, that found the company knew about the harm Instagram can cause teenagers - especially teen girls - when it comes to mental health and body image issues.
Meta has since added a host of safety features, including separate accounts for teenagers with stronger protections on messaging and privacy, along with content restrictions.
But child safety experts, along with some former Meta employees, have long contended the features are little more than window dressing.
Arturo Béjar, a former Meta engineering director, testified last week that Meta consistently prioritized profits over safety in designing its products, focusing on how often and for how long people used them, even if it was detrimental to their mental well-being.
"If you step away from the product, they are not going to make any money," he said.
The outcome of the lawsuit could prove a turning point in how Big Tech deals with children. Thousands of lawsuits have been filed nationwide against social media companies over how their platforms treat and engage young users and collect their data.
Meta suffered two jury losses earlier this year, including a California verdict finding Meta and YouTube liable for harms to a young user.
Meta generated $201 billion in revenue in 2025, meaning the $17 billion settlement is equivalent to about 31 days of revenue. Its stock price began rising Tuesday on news of the possible settlement. It was up more than 2% in late morning trading.
Meta also agreed in 2024 to pay Texas $1.4 billion in a case alleging the company violated state laws by collecting and using facial recognition data.
The state still has a lawsuit pending alleging Meta and WhatsApp made false claims about encryption for WhatsApp messaging.
This is a developing story. Please check back for updates.
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This article originally published at Texas to receive over $1 billion in Meta settlement over youth social media harms.