Meta, the company behind Facebook and Instagram, agreed to pay up to $17 billion to settle claims with nearly every state in the country. Texas struck its own deal worth more than $1 billion, bringing Meta’s potential payout to roughly $18 billion.
But the bigger impact may not be the money, but what happens to social media itself.
Meta is promising sweeping changes to how young people use its platforms after claims it deliberately designed them to be addictive to children and misled the public about risks.
Madlin Mekelburg has been covering the case for Bloomberg and joined Texas Standard for a discussion.
This transcript has been edited lightly for clarity:
Texas Standard: Tell us about these two settlements. Why did Texas strike its own deal with matter?
Madlin Mekelburg: That is the question of the hour.
I mean, Meta unveiled a massive settlement, as you said, with nearly every state in the country, except for Texas. We’re still trying to figure out exactly how these deals came together, but they were announced at the same time, which kind of gives us a look behind the curtain at what calculations are happening at Meta right now as they try to resolve this litany of litigation that they’re facing.
Attorney General Ken Paxton did negotiate a separate deal with Meta, but it largely follows the same terms here as this multi-state agreement. The separate element here is this payment that they negotiated with them. It’s a separate chunk of change, but the terms are still the same ones that were reflected in this larger deal that they signed with every state.
Let’s talk a little bit about some of the changes. What has Meta actually agreed to change about the way kids and teenagers use Facebook and Instagram?
So there are some really specific changes that they’ve agreed to make as part of this deal, but broadly they have agreed to impose certain restrictions and limitations with the end goal being to reduce the amount of time that teens are spending on its platforms. Specifically, they’re trying to cut down on what they often call “problematic use,” which is where excessive scrolling kind of impacts your daily life, impacts your ability to focus at school, get out of bed in the morning because you’ve been scrolling all night.
Some of the restrictions we’re talking about include a time limit on how much time at teens can spend scrolling on the platform. They’re also introducing tools geared towards those nighttime social media hours where they’re cutting down on notifications and cutting down on access to the platform during key hours.
But they’ve also agreed to enhance some of their age-screening measures that they use because Meta has what’s called “teen accounts” already, where they try to direct users who are under 18 to sign up for. But sometimes kids are gonna be kids, they’re gonna sign up for a regular account that doesn’t have teen safeguards on it.
And so Meta’s promised to kind of beef up the tools that it has to scan and identify the age of users on its platforms and highlight people who might be teens and should be subject to these restrictions.
It is worth noting that Meta continues to deny wrongdoing here. Legally, has Meta made any concessions, or are we talking about perhaps shifting the frame of discussion away from kids to holding companies responsible for design features that might encourage compulsive engagement?
You’re right, they have not agreed to any legal liability. And that’s pretty clear in the settlement that this is not an admission of wrongdoing.
But I think an important thing to remember is that this case, or many cases with all these states, is just one component of like a massive web of litigation that’s happening right now involving Meta, but other social media companies, too, that have been filed by individuals who say they’ve personally been injured because they have experienced mental health harms as a result of their addiction to these platforms — and also by school districts across the country who have accused these companies of being public nuisances because it’s hooking kids and it’s affecting their ability to learn and engage when they come to school.
So it gets rid of a portion of the legal liability Meta has faced in this conversation, but there’s still hundreds to thousands of cases still to go just in this other category of personal injury.
You know, I can’t think of anything bigger when it comes to consumer product settlements. Maybe big tobacco, the settlements there. But $17-to-$18 billion… That’s not existential for Meta, right? That’s only like three or four months worth of profit for them.
No, it’s massive. And you’re right to bring up big tobacco. This case often gets compared to that. That settlement was north of $206 billion.
But this settlement does rank among the largest ever that we’ve seen in civil litigation. And it definitely is going to be a hit to Meta’s bottom line.
But at the end of the day, they’re only going to reach that $18 billion if certain criteria are met. That’s kind of a unique element built into that deal. At this point, they’ve committed to paying 70 percent and they’ll fork over the rest of it, the remaining 30 percent, if other social media platforms commit to making similar changes to how teens engage with their content.
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