Meta Platforms agreed to a proposed multistate teen-safety settlement worth up to $17 billion, ending a federal trial that began days ago in Oakland, and its stock rose 1% to $575.60 at midday Wednesday. The settlement resolves allegations that Facebook and Instagram were designed to encourage compulsive use among children and teens, with payments running in annual installments over 10 years and California potentially receiving $1.5 billion to $2.1 billion. Participating states receive 70% of the allocated payment, while the remaining 30%, or $5.3 billion, is released only if YouTube and TikTok implement the same age assurance measures and match that amount. The $17 billion deal is a fraction of the $1.4 trillion in damages Meta said four states could seek, and Meta had booked a $2.4 billion charge related to legal proceedings in Q2 2026. Meanwhile, Snap stock fell 9% to $5.42 after Pennsylvania Attorney General Dave Sunday sued Snapchat over compulsive-use design and risks to minors, and Reddit slid 3% to $156.78 in sympathy, while the Global X Social Media ETF declined 0.7% to $45.28.
Snap IncPennsylvania AG sues Snapchat over compulsive-use design, causing 9% drop.
Meta Platforms Inc.Meta settles teen safety suit for $17B, removing legal uncertainty and potential damages.
Reddit, Inc.Reddit slides in sympathy with Snap's lawsuit, but no direct mention.
