To: Companies developing apps, games, social and AI companion/chatbot products directed at or potentially reaching minors (United States / China / Global) | Attorney reminders and compliance recommendations | August 2026 | For reference only; does not constitute legal advice on any specific matter
If your company's products are directed at minors, or are not deliberately so directed but are in fact used by a large number of minors, the following case merits careful study by the companies concerned. On August 26, 2026, social platform giant Meta (the parent company of Facebook and Instagram) agreed to pay up to approximately USD 17 billion over ten years to settle claims by dozens of U.S. states (brought since 2023 by a total of 42 attorneys general, including a joint federal action by 33 states) that it "designed its products to get kids addicted"—the largest single-case settlement in the history of the U.S. technology industry. The case arose in the United States and is governed by U.S. law, but it offers directly relevant lessons for companies with similar products worldwide. This article explains to companies: why the case arose, what the law is pursuing, and whether this red line is consistent globally, and provides compliance recommendations separately for U.S. companies, Chinese companies and other global companies.
Note on the characterization of the "child-safety settlement"
This case is commonly known in the United States as the "child-safety settlement." The term "child safety" here has a specific meaning that requires particular explanation:
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It does not refer to personal injury incidents, nor is it the same as cases involving child sexual abuse material (CSAM);
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It specifically refers to—harm to the physical and mental health of minors (such as addiction, sleep deprivation, anxiety and depression, and body-image problems) caused by the "addictive design" of social/digital products and weak age thresholds, as well as the collection of children's personal information without parental consent (involving COPPA);
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Accordingly, the "safety" focus of this case is on "the protection of minors' mental health, usage behavior and personal data through product design," and the object of regulatory scrutiny is product design and default settings, not specific content on the platform.
I. The core of the Meta child-safety case: what is alleged is not "content" but the platform's "design"
The states' case against Meta rests not on "bad content on the platform" but on "the platform being deliberately designed to get minors addicted." This is the most fundamental difference between this case and previous platform-liability cases. In 2023, a total of 42 state and district attorneys general filed suit against Meta—33 states filed a joint (consolidated) action in the U.S. District Court for the Northern District of California in October of that year, while the District of Columbia and the remaining states filed separately in their own courts—jointly alleging that Meta knew its design would harm adolescents' physical and mental health yet proceeded anyway, and concealed this from the public (approximately 29 states participated at the trial stage). The related federal cases were consolidated in the U.S. District Court for the Northern District of California, with trial commencing on August 18, 2026, and a proposed settlement reached one week later.
The significance of this case is that the defense platform companies have habitually relied on in the past—that "the content was not published by us and the platform is exempt from liability"—is essentially unavailable under the "design defect" theory concerning their platforms.
II. Why does "product design" itself expose companies to liability?
The regulators' logic is: if a company's product, through a whole set of mechanisms, systematically exploits minors' immature self-control to extend their time on the product, the company must bear responsibility for the harm thereby caused. The repeatedly cited "addictive design" features include:
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Infinite scrolling—removing natural stopping points;
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Push notifications at unpredictable intervals—repeatedly “recalling” users in the manner of intermittent rewards;
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Recommendation algorithms that treat “stickiness/engagement” as the sole optimization objective—prioritizing content that maximizes time spent rather than content most beneficial to users;
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Social incentives such as likes, read receipts and consecutive check-ins—amplifying adolescents' sensitivity to and anxiety about peer approval.
These mechanisms are alleged to cause: compulsive use by minors, sleep deprivation, attention and emotional problems, body-image anxiety, and even psychological harm associated with depression and anxiety. At the same time, despite knowing that large numbers of children under 13 were using the platform, it collected their personal information without parental consent, which has been alleged to violate the U.S. Children's Online Privacy Protection Act (COPPA). Please note: many products feature each of these “design” elements—this is precisely the source of the case's exemplary significance.
III. The Remediation Meta Is Required to Undertake—i.e., What Companies May Be Required to Do in the Future
The most noteworthy warning for companies in this settlement is that it turns a series of product modifications into “enforceable obligations.” The following list can be read directly as the “compliance baseline” in the eyes of regulators:
Remediation the settlement requires Meta to implement (with respect to minors):
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- Set a daily usage time limit by default (by default, not as an optional feature);
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- Lock use by default at night, releasable only by parents;
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- Provide stronger parental supervision and risk management tools;
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- Adopt robust age verification to identify users under 18 and under 13;
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- making false or misleading claims about its own safety features;
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- accepting compliance oversight by an independent third-party auditor.
On effectiveness: this settlement is currently still "proposed" and will only be final upon final approval by the presiding judge, Yvonne Gonzalez Rogers; according to reports, the judge has indicated a inclination to approve, but as of this article no formal approval has been given. Meta has stated that it will begin implementation "within months." For companies, there is no need to wait for finality—the checklist above should be treated as a reference standard now.
IV. Legal Logic: Regulators Are Using "Old Law," and the Threshold Is Not High
Many companies mistakenly believe that "if there is no dedicated algorithm/AI law, no one can regulate me." This case is precisely the opposite: the states did not rely on any new legislation, but instead deployed a combination of three existing laws—(1) state consumer protection laws, targeting false or misleading statements and omissions regarding product safety; (2) public nuisance, targeting persistent harm to public health (especially that of minors); and (3) the federal COPPA, targeting the collection of children's data without parental consent. This means that even in areas without dedicated legislation, regulators can still use traditional law to directly scrutinize companies' product design and default settings. "No dedicated law means no risk" is a dangerous illusion.
V. Lawyer Compliance Recommendations: Which Companies Is the Risk Spreading To
⚠ Compliance recommendation: A company is already in the risk zone if it meets any of the following circumstances
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The product contains mechanisms to retain users and lengthen usage time (infinite scroll, push notifications, engagement algorithms, etc.);
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Minors are present among users—regardless of whether the company "targets" minors, liability may arise as long as they are in fact present;
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The age threshold is merely nominal (age is self-selected by users only);
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The company has publicly promoted commitments such as "safe" or "suitable for teenagers," yet these do not match actual features;
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The product is an AI companion, virtual partner, or chatbot—because emotional stickiness is stronger, it is highly likely to become the next target of "design remedy"-style liability.
VI. Does This Case Only Govern the United States? — Are the Red Lines Globally Consistent?
This is the question enterprises care about most. The answer has two layers:
First layer (applicable law): This case applies U.S. law, but what determines whether an enterprise is "regulated" is not the company's nationality, but the market it serves. As long as an enterprise provides products to U.S. users (especially minors in the relevant states), or in fact collects data on U.S. children, it may fall within the jurisdiction of U.S. state consumer protection laws and the federal COPPA — even if its headquarters is located in China, Europe, or anywhere else. Conversely, if an enterprise does not enter the U.S. market at all, the U.S. legal liability in this case does not, in principle, apply directly. In other words: entering the U.S. market = directly bound; not entering = not directly bound by that U.S. law.
Second layer (regulatory trend): But it is wrong to assume that "not entering the United States means no worries." The red line of "addictive design + weak age gates + minors' data" is converging into legislation worldwide — major jurisdictions are all tightening in the same direction. Therefore, even if not in the U.S. market, global enterprises should use this case as a "leading indicator" for reference, rather than watching from the other shore.
The Same Red Line Is Becoming Law Everywhere
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United States: state consumer protection laws, public nuisance, COPPA; state-level new rules such as California SB 243 (companion chatbots) and the New York RAISE Act.
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China: the Regulations on the Protection of Minors in Cyberspace, the specialized chapter on cyberspace protection in the Law on the Protection of Minors, anti-addiction and "minor mode," the Provisions on the Administration of Algorithmic Recommendations (prohibiting inducing minors into addiction), and the Interim Measures for the Administration of Human-like Interactive AI Services.
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European Union: minors protection obligations under the Digital Services Act (DSA), the prohibition on targeted advertising to children, enforcement against "addictive design" such as infinite scrolling/autoplay/personalized recommendations, and the Commission's guidelines on minors protection; age verification is an enforcement priority in 2026.
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United Kingdom: the Online Safety Act and the Age Appropriate Design Code (Children's Code).
Conclusion: enterprises entering the U.S. market must directly benchmark against the compliance baseline of this case; enterprises not entering the U.S. market, although not directly bound by U.S. law, likewise need to study it carefully because their own country/region is establishing the same rules. For enterprises "going global," it is even more necessary to simultaneously satisfy the dual requirements of the target market and the home country.
VII. Classified Compliance Recommendations
Below are actionable priorities by enterprise type (where cross-applicable, the stricter standard prevails):
(A) U.S. enterprises / enterprises that have entered the U.S. market
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① Directly benchmark against the settlement baseline: time limits for minors, nighttime restrictions, and parental controls enabled by default;
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② Deploy robust age verification to identify users under 18 and under 13 and provide tiered protection;
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③ Strictly comply with COPPA: obtain verifiable parental consent for users under 13 and minimize data;
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④ Benchmark against new state-level rules, such as California SB 243 and the New York RAISE Act, and implement uniformly according to the strictest state requirements;
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⑤ Ensure that all external "safety" claims are truthful and verifiable, and avoid constituting deceptive statements under the FTC Act or state law;
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⑥ Properly manage internal research and promptly address identified risks—assume that internal documents may be subject to compelled disclosure in the future.
(B) Chinese enterprises (including enterprises expanding overseas)
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① First achieve domestic compliance: implement the Regulations on the Protection of Minors in Cyberspace—minor mode/dedicated zones, anti-addiction measures, impact assessments, algorithms must not induce addiction, and AI anthropomorphic services must shield children from "virtual companions" and obtain parental consent;
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② If a product reaches U.S. users (including being downloadable from app stores and being marketed to the United States), it is subject to U.S. COPPA and state law—a separate U.S.-facing compliance program (age verification, parental consent, safe defaults) must be established;
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③ Going global = dual compliance: the target market (U.S./Europe/U.K., etc.) and Chinese rules apply in parallel, with the stricter standard as the baseline; do not assume that "domestic compliance" satisfies overseas requirements by default;
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④ Handle cross-border data transfer and children's data prudently, taking into account both China's cross-border data transfer rules and the children's privacy laws of the target market;
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⑤ Ensure external communications are unified and truthful, and avoid constituting false advertising in any market;
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⑥ AI companion/chatbot products aimed at minors must in particular have safe defaults and crisis-intervention mechanisms built in in advance.
(C) Other global companies
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① First determine whether the company is entering the US market: if so, benchmark against the US compliance baseline in section (A) above;
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② Regardless of whether the company enters the US market, it should benchmark against local rules: the EU Digital Services Act (DSA) (protection of minors, prohibition of targeted advertising to children, addictive design and age verification), the UK Online Safety Act and Age Appropriate Design Code, among others;
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③ Use the "strictest jurisdiction" as the unified design standard, and avoid maintaining multiple conflicting sets of default settings for different markets;
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④ Make age verification a compliance priority for 2026 (enforcement in many jurisdictions is focused on this);
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⑤ Safety claims must be truthful; internal risk research must be documented and promptly acted upon;
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⑥ For high-engagement products such as AI companions/chatbots, establish safe default settings for minors in advance.
Conclusion
The signal this case sends to the entire industry is very direct: the "design" that makes minors addicted is itself becoming a ground for suit, and this red line is tightening simultaneously in the United States, China, the European Union, the United Kingdom and elsewhere. Whichever market a company operates in, rather than waiting for a court or regulator to order remediation and then spending heavily to fix things reactively, it is better to build minor protection "into" the architecture from the outset of product design and to keep a written record of every compliance decision. "Launch first, add compliance later" is now the most costly path. If you need a compliance assessment of your company's specific products and target markets, please contact our lawyers.
Disclaimer: This article is compiled from public reports as of August 2026 and is intended to provide general explanation and risk reminders to relevant product companies; it does not constitute legal advice on any specific matter. The rules of each jurisdiction are complex and constantly evolving, and some facts (such as whether the settlement has received final court approval and the exact number of participating states) differ slightly among sources; the settlement remains proposed until formally approved by the court. Before taking action, please consult our firm's AI-related practicing lawyers regarding your specific circumstances.
CHINESE / ENGLISH
English Version
Reading the Product-Compliance Red Line from Meta's US$17 Billion Child-Safety Settlement
To: Companies developing Apps, games, social platforms, and AI companion / chatbot products that are aimed at — or likely to reach — minors (United States / China / Global)
Counsel's Alert & Compliance Guidance | August 2026 | For general information only; not legal advice on any specific matter
If your company's product is aimed at minors — or, though not intentionally aimed at them, is in fact used by large numbers of minors — the following case warrants close study. On August 26, 2026, social-media giant Meta (the parent of Facebook and Instagram) agreed to pay up to approximately US$17 billion over ten years to resolve claims by dozens of U.S. states (brought since 2023 by a total of 42 attorneys general, 33 of them in a consolidated federal action) that it had “designed its products to addict children” — the largest single-case settlement in the history of the U.S. technology industry. The case arose in the United States and is governed by U.S. law, yet it carries direct lessons for comparable product companies worldwide. This memorandum explains why the case arose, what the law is targeting, whether this red line is consistent across jurisdictions, and offers compliance recommendations separately for U.S., Chinese, and other global companies.
A note on the term “child-safety settlement”
This case is commonly referred to in the United States as a “child-safety settlement.” The phrase “child safety” here has a specific meaning that merits clarification:
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It does not refer to a physical-safety incident, nor is it a case about child sexual abuse material (CSAM);
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It refers specifically to the physical and psychological harm to minors (such as addiction, sleep deprivation, anxiety and depression, and body-image problems) caused by the “addictive design” and weak age gates of social / digital products, together with the collection of children's personal information without parental consent (implicating COPPA);
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Accordingly, “safety” in this case turns on protecting minors' mental health, usage behavior, and personal data through product design — the object of regulatory scrutiny is the product's design and default settings, not the specific content carried on the platform.
I. The heart of the Meta child-safety case: the claim targets the platform's “design,” not its “content”
The states sued Meta not on the theory that “there is bad content on the platform,” but that “the platform was deliberately designed to addict minors.” That is the fundamental distinction between this case and earlier platform-liability cases. In 2023, a total of 42 state and territorial attorneys general sued Meta — 33 states brought a consolidated (joint) action in the U.S. District Court for the Northern District of California that October, while the District of Columbia and several other states filed separately in their own courts — jointly alleging that Meta knew its design would harm the physical and mental health of adolescents yet proceeded anyway, and concealed this from the public (roughly 29 states participated at the trial stage). The related federal actions were consolidated before the Northern District of California; trial opened on August 18, 2026, and a proposed settlement was reached about a week later.
The significance of the case is this: the defenses that platform companies have traditionally relied on — “the content was not published by us; the platform is not liable” — are essentially unavailable under this “design-defect” theory.
II. Why can “product design” itself expose a company to liability?
The regulators' logic runs as follows: if a company's product uses an integrated set of mechanisms to systematically exploit minors' still-immature self-control in order to prolong their time on the platform, the company must answer for the resulting harm. The “addictive design” features repeatedly singled out include:
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Infinite scroll — removing the natural stopping point;
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Push notifications with unpredictable timing — repeatedly “recalling” the user, much like an intermittent reward;
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Recommendation algorithms optimized solely for “stickiness / engagement” — prioritizing content that maximizes time-on-app rather than content that best serves the user;
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Social-validation mechanics such as likes, read receipts, and streaks — amplifying adolescents' sensitivity to peer approval and their anxiety.
These mechanisms are alleged to cause compulsive use, sleep deprivation, attention and mood problems, body-image anxiety, and even depression- and anxiety-related psychological harm among minors. At the same time, knowingly collecting the personal information of large numbers of children under 13 without parental consent has been alleged to violate the U.S. Children's Online Privacy Protection Act (COPPA). Note that many products incorporate every one of these “design” features — which is precisely what gives this case its precedential force.
III. What Meta was required to change is what companies may be required to do next
The most cautionary feature of this settlement is that it converts a series of product changes into “enforceable obligations.” The following list can be read directly as the “compliance baseline” in the eyes of regulators:
Remedial measures the settlement requires Meta to implement (for minors):
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- Default daily time limits (a default, not an optional feature);
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- Overnight use locked by default, removable only by a parent;
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- Stronger parental supervision and control tools;
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- Robust age assurance to identify users under 18 and under 13;
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- A prohibition on false or misleading statements about its own safety features;
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- Compliance oversight by an independent third-party auditor.
On the effective date: the settlement remains “proposed” and will not become final until approved by the presiding judge, Yvonne Gonzalez Rogers; she is reported to have indicated that she is inclined to approve it, though she had not formally done so as of this writing. Meta has said it will begin implementation “within months.” For companies, there is no need to wait for finality — the list above should already be treated as a reference standard.
IV. The legal mechanics: regulators are using “old laws,” and the threshold is not high
Many companies mistakenly assume that “with no dedicated algorithm / AI statute, no one can regulate me.” This case shows the opposite. The states relied on no new legislation; instead, they combined three existing bodies of law — (1) state consumer-protection statutes, aimed at false or misleading statements and concealment regarding product safety; (2) public nuisance, aimed at ongoing harm to public (and particularly adolescent) health; and (3) the federal COPPA, aimed at the collection of children's data without parental consent. The lesson is that, even in areas without dedicated legislation, regulators can still use traditional law to scrutinize a company's product design and default settings directly. “No dedicated statute means no risk” is a dangerous misconception.
V. Compliance guidance: which companies the risk is spreading to
⚠ Compliance alert: if any of the following applies, the company is already in the risk zone
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The product contains mechanisms to retain users and prolong time-on-app (infinite scroll, push notifications, engagement-driven algorithms, and the like);
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Minors are among the users — whether or not the company “targets” minors, their factual presence alone may give rise to liability;
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Age gating is nominal only (relying solely on users self-declaring their age);
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The company has publicly promoted “safety” or “suitable for teens” claims that do not match the product's actual features;
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The product is an AI companion, virtual partner, or chatbot — with stronger emotional stickiness, it is a likely next target for “design-remedy” enforcement.
VI. Does this case concern only the United States? — Is the red line globally consistent?
This is the question companies care about most. The answer has two layers.
Layer one (application of law): the case is governed by U.S. law, but what determines whether a company is “regulated” is not its nationality but the market it serves. So long as a company offers products to U.S. users (particularly minors in the relevant states), or in fact collects U.S. children's data, it may fall within the reach of U.S. state consumer-protection laws and the federal COPPA — even if it is headquartered in China, Europe, or anywhere else. Conversely, if a company does not enter the U.S. market at all, the U.S. liability at issue here does not, in principle, apply directly. In short: entering the U.S. market = directly bound; staying out = not directly bound by this U.S. law.
Layer two (regulatory trend): but “no U.S. presence means nothing to worry about” is mistaken. The red line of “addictive design + weak age gates + minors' data” is converging in legislation worldwide, with the major jurisdictions all tightening in the same direction. Accordingly, even without a U.S.-market presence, global companies should treat this case as a leading indicator to learn from, rather than a distant spectacle.
The same red line is becoming law across jurisdictions
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United States: state consumer-protection statutes, public nuisance, and COPPA; state-level measures such as California SB 243 (companion chatbots) and New York's RAISE Act.
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China: the Regulations on the Protection of Minors in Cyberspace; the online-protection chapter of the Law on the Protection of Minors; anti-addiction rules and “minor mode”; the Provisions on the Administration of Algorithmic Recommendations (which forbid inducing minors into addiction); and the Interim Measures for the Administration of AI Anthropomorphic Interactive Services.
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European Union: minor-protection obligations under the Digital Services Act (DSA); a ban on targeted advertising to children; enforcement against “addictive design” such as infinite scroll, autoplay, and personalized recommendations; and the Commission's guidelines on the protection of minors — with age assurance a 2026 enforcement priority.
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United Kingdom: the Online Safety Act and the Age Appropriate Design Code (Children's Code).
Bottom line: companies entering the U.S. market must benchmark directly against this case's compliance baseline; companies that stay out of the U.S. market, though not directly bound by U.S. law, must still take it seriously, because their home country or region is enacting the very same rules. For companies expanding abroad, the imperative is to satisfy the dual requirements of both the target market and the home jurisdiction.
VII. Compliance recommendations by company type
The following sets out actionable priorities by company type (where more than one applies, the stricter standard governs):
(A) U.S. companies / companies already in the U.S. market
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① Benchmark directly against the settlement baseline: time limits, overnight restrictions, and parental controls for minors, on by default;
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② Deploy robust age assurance to identify users under 18 and under 13, with tiered protections;
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③ Comply strictly with COPPA: obtain verifiable parental consent for users under 13 and practice data minimization;
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④ Track state-level measures such as California SB 243 and New York's RAISE Act, applying the strictest state standard uniformly;
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⑤ Ensure that every outward “safety” claim is truthful and verifiable, so as to avoid deceptive statements under FTC / state law;
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⑥ Manage internal research prudently and address risks promptly — assume internal documents may later be compelled to disclosure.
(B) Chinese companies (including those expanding overseas)
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① Get domestic compliance right first: implement the Regulations on the Protection of Minors in Cyberspace — minor mode / zones, anti-addiction measures, impact assessments, algorithms that do not induce addiction, and, for AI anthropomorphic services, blocking “virtual partner” features for children and obtaining parental consent;
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② If the product reaches U.S. users (including being downloadable from app stores or marketed to the U.S.), it is subject to U.S. COPPA and state law — a separate U.S.-facing compliance layer (age assurance, parental consent, safe defaults) is required;
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③ Going global = dual compliance: run the target-market rules (U.S. / EU / UK, etc.) in parallel with the Chinese rules, taking the stricter as the baseline; never assume that “already compliant at home” satisfies overseas requirements;
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④ Handle cross-border transfers and children's data with care, reconciling China's data-export rules with the target market's children's-privacy laws;
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⑤ Keep external messaging consistent and truthful to avoid false advertising in any market;
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⑥ For AI companion / chatbot products aimed at minors in particular, build in safe defaults and crisis-intervention mechanisms in advance.
(C) Other global companies
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① First determine whether you are entering the U.S. market: if so, benchmark against the U.S. baseline in (A) above;
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② Whether or not you enter the U.S., benchmark against local rules: the EU DSA (protection of minors, ban on targeted advertising to children, addictive design, and age assurance), the UK Online Safety Act and Children's Code, and the like;
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③ Use the “strictest jurisdiction” as a single design standard, avoiding the maintenance of multiple, conflicting sets of defaults across markets;
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④ Make age assurance a 2026 compliance priority (enforcement across jurisdictions is focused on it);
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⑤ Keep safety claims truthful; document internal risk research and address it promptly;
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⑥ For high-stickiness products such as AI companions / chatbots, build in safe defaults for minors in advance.
Closing
The signal this case sends to the entire industry is unmistakable: “design” that addicts minors is itself becoming a ground for suit, and this red line is tightening in parallel across the United States, China, the EU, and the UK. Whatever market a company operates in, rather than remediating reactively — and at great expense — only after a court or regulator so orders, the wiser course is to build minor protection into the product architecture from the outset and to keep a written record of every compliance decision. “Launch first, fix compliance later” is now the most expensive path of all. For a compliance assessment tailored to your specific product and target markets, please contact our attorneys.
Disclaimer: This memorandum is compiled from public reporting available as of August 2026 and is intended to provide general explanation and risk alerts to relevant product companies; it does not constitute legal advice on any specific matter. The rules across jurisdictions are complex and continually evolving, and certain facts (such as whether the settlement has received final court approval and the exact number of participating states) vary among sources; the settlement remains proposed until formally approved by the court. Before taking action on any specific matter, please consult our firm's AI-practice attorneys.
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*This article is an original work of Mankun Law Firm and represents only the personal views of the author. It does not constitute legal consultation or legal advice on any specific matter. For reprinting and legal consultation, please contact our customer service: mankunlawyer / MankunLawFirm (WhatsApp)
