Meta, the company behind Facebook and Instagram, has agreed to pay up to US$18 billion, about Sh2.3 trillion, over the next decade to settle claims that its platforms were designed in ways that encouraged children and teenagers to spend too much time online.
The settlement follows a major legal battle involving US states that accused Meta of putting growth and user engagement ahead of the safety of young users. The states argued that Facebook and Instagram used features that could lead to compulsive use while the company failed to properly warn parents and users about the risks.
Meta has denied wrongdoing, but has agreed to make major changes to how teenagers use Facebook and Instagram.
Under the agreement, users under 18 will face a default two hour daily limit on the platforms. Teenagers will also be blocked from using the apps between midnight and 6am unless a parent gives permission. Notifications will be restricted during school hours to reduce distractions.
Meta will further introduce stronger age checks to identify children using its platforms and improve restrictions on content and interactions involving young users.
The company will also make some features less prominent for teenagers, including hiding like counts and introducing stronger safety settings by default.
The financial settlement is one of the biggest ever faced by a technology company over the alleged harm caused by its products. The agreement includes a guaranteed payment running into billions of dollars, with additional money linked to whether other major social media companies adopt similar child safety measures.
The case has been closely watched because it goes beyond a financial penalty. The settlement forces Meta to change parts of Facebook and Instagram that have been central to how users consume content.
For parents, the changes could mean more control over how long their children spend on the platforms and when they can access them.
For Meta, the agreement brings an end to a major legal fight, but it does not end the wider debate about social media and children.
Other technology companies, including TikTok, YouTube and Snapchat, are facing similar pressure from regulators, parents and lawmakers over the effect of social media on young users.
The settlement also comes shortly after a New Mexico court ordered Meta to pay hundreds of millions of dollars over claims involving the mental health of children using its platforms. That ruling brought Meta's penalties in that case to about US$942 million.
The latest settlement sends a clear message to the technology industry: social media companies are facing growing legal pressure over how their platforms are designed and how they affect children.
Meta may have avoided a much larger trial outcome, but it will now have to put billions of dollars behind changes aimed at making Facebook and Instagram safer for young users.