Instead the social media giant "routinely continued to collect" children's personal information, like their locations and email addresses, without parental permission, in violation of a federal children's privacy law.
Meta could face hundreds of millions of dollars, or more, in civil penalties should the states prove the allegations.
"Within the company, Meta's actual knowledge that millions of Instagram users are under the age of 13 is an open secret that is routinely documented, rigorously analysed and confirmed," the complaint said, "and zealously protected from disclosure to the public."
Public prosecutors accused Meta executives of publicly stating in congressional testimony that the company's age-checking process was effective and that the company removed underage accounts when it learned of them — even as the executives knew there were millions of underage users on Instagram.
The lawsuit argues that Meta elected not to build systems to effectively detect and exclude such underage users because it viewed children as a crucial demographic — the next generation of users — that the company needed to capture to assure continued growth.
An internal 2020 Meta presentation shows that the company sought to engineer its products to capitalise on the parts of youth psychology that render teens "predisposed to impulse, peer pressure, and potentially harmful risky behaviour," the filings show.
"Teens are insatiable when it comes to 'feel good' dopamine effects," the Meta presentation shows, according to the unredacted filing, describing the company's existing product as already well-suited to providing the stimuli that trigger the potent neurotransmitter. "And every time one of our teen users finds something unexpected, their brains deliver them a dopamine hit."
"In December 2017, an Instagram employee indicated that Meta had a method to ascertain young users' ages but advised that 'you probably don't want to open this Pandora's box' regarding age verification improvements," prosecutors say in the suit.
Some senior executives raised the possibility that cracking down on underage usage could hurt Meta's business.
Meta made little progress on automated detection systems or adequately staffing the team that reviewed user reports of underage activity, " Prosecutors claim.
The unredacted material includes allegations that Meta Chief Executive Mark Zuckerberg instructed his subordinates to prioritise boosting its platforms' usage above the well-being of users.
Zuckerberg also repeatedly dismissed warnings from senior company officials that its flagship social-media platforms were harming young users, according to unsealed allegations in a lawsuit filed by Massachusetts earlier this month.
The complaint cites numerous other executives making public claims that were allegedly contradicted by internal documents. While Meta's head of global safety, Antigone Davis, told Congress that the company didn't consider profitability when designing products for teens, a 2018 internal email stated that product teams should keep in mind that "The lifetime value of a 13 y/o teen is roughly $270" when making product decisions.