In August 2026, Meta agreed to one of the largest consumer protection settlements in American history. The settlement resolves claims from 47 states alleging that Meta intentionally designed its Facebook and Instagram platforms to be addictive to young users and harmful to youth mental health.
As part of the settlement, Meta agreed to pay up to US$17.1 billion – approximately 20% of Meta’s 2025 pretax profits – in penalties over the next 10 years. Meta also agreed to implement changes to its platforms for young users, including daily time limits, access restrictions during school hours and late nights, and “productivity breaks” that interrupt scrolling every 60 minutes.
The $17.1 billion penalty and promised changes to the platforms have grabbed the headlines. But, as a law professor who studies social media regulation, I believe that what the settlement does not include will prove more important to youth safety in the long run. The settlement does not restrict Meta from continuing to collect data from young users, from using that data to sell its targeted ads, or from serving those targeted ads to young users.
In short, while Meta agreed to some limited changes to safeguard young users, it also succeeded in protecting its surveillance-based business model.
How Meta makes money
Meta’s core business is advertising. It is the world’s second-largest digital advertising company by revenue and will soon overtake Google to claim first place. Last year, Meta generated over $200 billion in revenue, up 22% over the prior year.
Meta’s growing revenue comes from delivering more ads to platform users and charging advertisers more for those ads. For Meta, maximising the amount of time that users spend on its platforms is critical to revenue growth. The more time users spend on Meta’s platforms, the more ads Meta can serve to those users and, consequently, the more money Meta makes.
Meta’s ad business operates on a surveillance model that gives advertisers the ability to serve personalised ads to the users who are most likely to purchase the advertiser’s goods or services. Meta does this by collecting a large amount of data about platform users. This data includes users’ friends, followers and other connections; the websites they visit, the apps they use, the games they play and the purchases they make; their demographics, including education level; the ads they see and how they interact with them; and how they use third parties’ products and services, online or in person.
The more time a user spends on Meta’s platforms, the more Meta learns about that user and the more effective its targeted ads become. This means Meta has a strong incentive to keep users scrolling on its platforms and to collect as much data as possible from those users. The recent settlement does not change that incentive structure.
A history of breached settlements
This is not the first time that Meta has settled with the government and agreed to change its platforms to improve user safety. In 2012, Meta, then Facebook, Inc., settled with the Federal Trade Commission to resolve claims that it deceptively designed its privacy settings and collected data from users without their knowledge.
Then, in 2019, the FTC again sued Facebook, alleging that it violated the terms of the 2012 agreement by continuing to collect user data without consent. Again, the company settled, agreeing to pay a $5 billion penalty and again promising to stop its deceptive data collection practices.
Based on Meta’s prior conduct violating the terms of its settlements, many observers questioned whether the $5 billion penalty would deter Meta from continuing its data collection practices. It did not take long to get an answer.
In 2023, the FTC brought yet another action against Meta, alleging that it had violated the terms of the 2019 settlement. As a result of this violation, the FTC sought to restrict Meta from collecting and monetising the data of young users.
Meta responded by challenging the FTC’s authority to impose those restrictions. Litigation in that case is ongoing.
Meta’s incentives remain the same
In 2026, Meta has again settled with the government, again paid a penalty and again promised changes. And again, those promises do not restrict it from collecting data and monetising young users, nor does the settlement restrict Meta from continuing to serve young users targeted ads.
Youth safety advocates and legislators have long fought to stop social media platforms from collecting data from young users and targeting ads to them. They have argued that doing so would remove social media companies’ incentive to design platforms that addict young people. By not including data collection and targeting restrictions in the settlement, I believe that the states missed an opportunity to change this incentive structure.
Repeatedly violating the terms of its settlements with the government seems to be an effective strategy for Meta. The company has learned that penalties for doing so are small in comparison with the profits gained through its conduct. This recent settlement looks like more of the same. With this pattern in mind, it is fair to ask whether the settlement will provide meaningful protection for young social media users or just allow Meta to continue with business as usual.
As former FTC Commissioner Rohit Chopra stated when dissenting from the FTC’s 2019 settlement, “When companies can violate the law, pay big penalties and still turn a profit while keeping their business model intact, enforcement agencies cannot claim victory.”
I believe this most recent settlement repeats the patterns of the past and continues to leave young users vulnerable on Meta’s platforms.
- is an Associate Professor of Law, University of Illinois Chicago
- This article first appeared in The Conversation
