Dive Brief:
- Meta Platforms — the social media conglomerate behind Instagram, Facebook, WhatsApp and others — has reached a proposed settlement for up to $18 billion to end its ongoing child privacy case, attorneys general in the case announced on Wednesday.
- Under the proposed settlement — in a case brought by 52 attorneys general from U.S. states, territories and the District of Columbia — Meta will also be required to implement default time limits and blocks for users aged under 18. The social media conglomerate is calling on TikTok and YouTube to implement similar limits, it said in an open letter Wednesday.
- Nearly $17 billion will be used to settle a lawsuit brought forward by 29 states in October 2023, which alleged that Meta illegally collected and used the data of children under the age of 13 who used its platforms. The case went to trial beginning on Aug. 18, and the proposed settlement will end the litigation. The remaining $1B will settle claims between Meta and the state of Texas.
Dive Insight:
California Attorney General Rob Bonta and Arizona AG Kris Mayes co-led the initial lawsuit, filed in federal court in the Northern District of California, and were initially joined by a bipartisan coalition of 33 AGs that has since grown to 52 AGs.
Florida, not a party to the lawsuit or the settlement, filed a 2023 separate lawsuit in federal court in the Middle District of Florida under then-AG and current Sen. Ashley Moody. Texas AG Ken Paxton, also not party to the case, separately announced a settlement with Meta on Wednesday for “over $1 billion.”
Meta Chief Legal Officer C.J. Mahoney said in a press release Wednesday that the settlement will create “a new set of rules governing teens’ use of social media.” Mahoney said the new framework is “the right path forward for our whole industry” but will only work if Meta is joined by other social media platforms.
“The framework we’ve negotiated will empower parents to easily manage how their children access our platforms,” Mahoney said. “Because teens move fluidly across dozens of apps, we need an industry-wide solution.”
Meta has denied the allegations brought forward by the states.
Outside of the financial terms of the agreement, Meta agreed to implement default two-hour time limits, a night mode blocking access to the app between midnight and 6 a.m., mute notifications during typical school hours and default to non-algorithmic feeds for Instagram and Facebook users between the ages of 13 and 17. Parents would have to disable those default changes, which are required to remain in place for 10 years under the settlement.
Meta’s open letter calls on YouTube and TikTok to implement similar restrictions for teen users of the social media apps.
“We want to ensure teens benefit from this new industry standard, but we cannot do it alone,” the letter says. “These protections will only be truly effective if we work with our peers — TikTok and YouTube — to put the same measures in place.”
The proposed settlement’s financial terms would see the suing states receive up to $12.7 billion in installments over a 10-year period. The settlement amount would increase by $5.3 billion, to $18 billion, if YouTube and TikTok also agree to the daily time limits, a night mode and age assurance measures and each match that $5.3 billion payment, according to Meta’s press release. Meta said half of the additional funding would be tied to YouTube’s payment and the other half would be tied to TikTok’s matching of the funds.
Outside of Texas’ settlement, the proposed settlement would see the coalition of 52 states, territories and D.C. receive up to $16.68 billion.
“Today, we have secured a settlement with Meta that will make social media less dangerous for our kids and make a world of a difference for children and their families,” Bonta said in a Wednesday press release. “Meta has agreed to make massive transformations that will reduce the risk of harm from its platforms — and will do it within months.”
An independent auditor will be used to help determine compliance with the settlement, which also includes additional age assurance measures. Under the proposed settlement, in which Meta “denies the allegations against it and that it has any liability to the Plaintiffs,” the social media company will also develop an age assurance within a year of its effective date.
Meta said it expects to incur approximately $10 billion in legal expenses in Q3 of this year related to the settlement, which were not contemplated as an expense during its Q2 earnings call, according to its release.
