Meta Platforms reached a $17 billion settlement with a consortium of states on Wednesday in a child privacy and social media addiction case that has weighed on Meta stock since 2023. This amount falls far short of the $200 billion sought by attorneys general and the more than $1 trillion that Meta lawyers believed the company could be liable for. Wall Street analysts are calling it a major win for Meta, with shares rallying about 1.5% to trade above $578. The settlement requires Meta to implement algorithmic changes limiting usage to two hours per day with nighttime blocks from 12am to 6am, which could impact user engagement and advertising effectiveness. Individual mental health lawsuits from thousands of plaintiffs remain pending and could still prove materially costly, according to TD Cowen analyst Paul Gallant.
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