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Meta Settles Major Minor-Safety Suit
Oh Zuck! // Illustration by Kate Walker
Meta settled a landmark case brought by 48 state attorneys general and four US territories, requiring the tech giant to pay states up to $18 billion and make major changes to how kids can engage with its apps.
The Big Picture: Meta lawyers have been spending a lot of time in court this year, losing or settling lawsuits brought by states, school districts, and individual plaintiffs over how the platform has addicted users. It’s a reckoning similar to the one the tobacco industry faced in the ’90s. And while Meta may be front and center, expect nearly every social-media platform to feel the heat.
Behind The Settlement: Meta settled just before CEO Mark Zuckerberg would need to take the stand to testify… so it’s safe to say the company didn’t want him to face the music.
Meta agreed to pay $18 billion over a 10-year period. Payments will go to every state except New Mexico (which separately settled) and Florida (which still plans to go to trial).
The company will also implement a default two-hour time limit for users under 18, a “night mode” that blocks the apps for minors between midnight and 6 a.m., and a “school mode” that disables push notifications during school hours from 8 a.m. to 3 p.m.
The time limits can only be changed by the user’s parents.
A federal judge still needs to approve the settlement, but that’s expected to happen quickly.
Closing Thoughts: There’s a fascinating wrinkle to the settlement — Meta will only be required to pay 70% of the settlement if TikTok and YouTube don’t voluntarily agree to each also pay $5.3 billion to the states and adopt similar restrictions for underage users. TikTok and YouTube have yet to comment on that deal point, but Meta plans to make a big ad push to pressure them to follow suit — Meta doesn’t want to be the only platform with a hand tied behind its back.
Amazingly, Meta’s stock went up yesterday because analysts believed the company would have to settle for way more than it did, with penalties possibly surpassing $1 trillion. Did Meta actually get off easy?
Prediction: Don’t expect TikTok and YouTube to make those concessions voluntarily. Another lawsuit may be just around the corner.
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Today’s email was written by David Vendrell.
Edited by Nick Comney. Polled and Copy-edited by Kait Cunniff.
Published by Darline Salazar.