Morgan Stanley: Meta's $18 Billion Teen-Safety Settlement Could Hit YouTube Harder

Meta has agreed to an approximately $18 billion settlement over how it engages young users on Instagram and Facebook, including daily time limits, overnight blocks, and notification restrictions during school hours. Meta denied wrongdoing. About $12.7 billion goes to participating states over 10 years, while the remaining roughly $5.3 billion is contingent on TikTok and YouTube adopting matching youth-protection measures.
Morgan Stanley analyst Brian Nowak called the settlement a "clearing event," arguing that youth-engagement limits like these could ultimately pose a bigger headwind for YouTube than for Meta, since long viewing sessions are more central to YouTube's business model. He maintained an Overweight rating and $775 price target on Meta shares.
Meta expects to record approximately $10 billion in legal expenses in the third quarter tied to the settlement, which was not included in its prior guidance range.