Meta’s recent agreement to pay up to $17 billion to settle claims related to the company’s design of Instagram and Facebook to attract children has prompted numerous states to outline how the funds should be used. Attorneys general from several states have emphasized that the settlement money ought to be directed toward addressing the harms caused by unhealthy social media use, improving youth mental health services, and supporting crisis intervention programs. However, the settlement reached in August contains limited binding provisions that guarantee such allocations.

The bulk of the settlement’s funds—approximately 70 percent of the total, roughly $11.7 billion—will be distributed with relative discretion to states, with only about 23 percent specifically earmarked for mental health or social media harm mitigation. Notably, some states have reserved all or part of their share for general government use; for example, Wyoming allocates its entire portion to the general fund, while Alaska divides it between its general fund and its attorney general’s enforcement budget.

Included in the $17 billion is $459 million related to a previous multistate investigation into Meta’s Cambridge Analytica data privacy scandal, according to a California Justice Department spokesperson. Meta has contested characterizations that the settlement funds are strictly for remediation, highlighting language in the agreement requiring states to certify to the IRS that at least half of the payment represents “compensatory restitution and remediation.” Tax experts clarify that this designation affects tax reporting rather than prescribing how the funds must be spent. Meta has not clarified whether it intends to pursue the associated tax deductions.

Experts in child development and digital health caution that, despite the settlement’s flexibility, states have a responsibility to ensure that the settlement benefits children and youth affected by the platforms. Candice Odgers, a developmental psychologist at the University of California, Irvine, highlighted that the legal action positioned children at the center of efforts to regulate big technology companies, adding that states should strive to make tangible improvements in youth welfare as a result.

Beyond the settlement, Meta faces ongoing legal challenges. In New Mexico, following a jury verdict that found Meta violated consumer protection laws multiple times, a judge is expected to determine the company’s financial liability. The state is seeking billions in damages. Meanwhile, California has enacted measures targeting addictive features such as infinite scroll for users under 16, though courts have blocked several state-level restrictions on social media products on free speech grounds, and additional legal challenges are anticipated.

Comparisons have been drawn between the Meta settlement and past landmark agreements with the tobacco and opioid industries. The 1998 tobacco settlement resulted in payments exceeding $176 billion over time but lacked stringent requirements on how funds were to be allocated for prevention or treatment. Former attorneys general involved in the tobacco litigation have criticized the lack of enforceable mandates, noting that many states used settlement funds to cover budget deficits rather than public health initiatives.

The more recent opioid settlements incorporated lessons from the tobacco experience by stipulating that at least 85 percent of funds must support opioid-related remediation, including prevention, treatment, and harm reduction services. Furthermore, opioid settlements mandated public reporting of expenditures and specified allowable uses to ensure accountability.

In contrast, the Meta agreement offers a list of suggested spending areas—including crisis hotlines, after-school programs, and training for medical professionals—but stops short of requiring states to allocate funds accordingly or to publicly disclose spending. Some observers view this flexibility as a double-edged sword, allowing future officials to adapt to evolving knowledge about social media’s effects but also risking that funds may be diverted away from impactful interventions.

The rapidly changing nature of social media platforms complicates efforts to identify effective prevention and treatment strategies. Mitch Prinstein, a psychologist and former chief science officer at the American Psychological Association, remarked on the absence of a well-established evidence base for mitigating social media harms, underscoring the challenge facing policymakers and public health officials alike.

As states begin to receive their shares of the settlement, the effectiveness of efforts to translate the funds into meaningful support for young people affected by social media will largely depend on political will and oversight mechanisms established at the state level.